On October 20, the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) jointly published a consultation paper with two draughts. These draughts are primarily concerned with evaluating the suitability of management body members, shareholders, and members who own qualifying shares in companies that issue asset-referenced tokens (ARTs) and companies that provide crypto-asset services (CASPs).
The proposed joint rules are intended to give regulatory agencies a standardised method for evaluating the fitness of shareholders or members who hold qualifying holdings in ART or CASP issuers, whether directly or indirectly. This includes completing prudential analyses for potential acquisitions and approving ART and CASP issuance. The standards also provide standardised criteria for assessing management body members’ integrity, knowledge, and capacity to devote enough time to their duties in ART and CASP issuer firms.
By determining the suitability of both the management body members of ART and CASP issuers and individuals wishing to hold or acquire qualifying stakes in them, these regulations aim to foster and safeguard the integrity of the cryptocurrency market and its related services as well as instill trust. The goal of the consultation period, which will be open until January 22, 2024, is to provide clarity and uniformity in assessing the suitability of the management body, shareholders, and members holding qualifying stakes while minimising the possibility of rule application discrepancies and arbitrage.
The European Union’s banking authority has urged stablecoin issuers to voluntarily follow certain “guiding principles” relating to risk management and consumer protection in advance of upcoming rules. The Markets in Crypto-Assets legislation (MiCA), which is expected to go into effect on June 30, 2024, was clarified by the EBA in its initial set of measures, which were released for public comment on July 12.