• The first phase of the Markets in Crypto-Assets Regulation (MiCA) applies from 30 June 2024.
• Issuers of asset-reference tokens (ARTs) must be authorized in the EU, which includes submitting a detailed application and meeting specific compliance obligations.
• A white paper detailing, amongst others, rights, technology, risks, environmental impacts, and reserve information must be submitted for the issuance of ARTs.
• Transitional provisions permit ART issuers (non-credit institutions) to continue operations if they apply for authorization by 30 July 2024. Credit institutions must notify their competent authority by the same date to continue operations until their white paper is approved.
• E-money tokens (EMTs) can only be offered in the EU by credit institutions and electronic money institutions authorized in the EU that have submitted a white paper to the competent supervisory authority.

The purpose of MiCA¹ is to bring certain types of crypto-assets within the regulatory and legal framework of the EU. MiCA regulates the issuers of crypto-assets in and to the EU as well as the service providers of crypto-assets. For a summary of MiCA, please refer to our previous OnPoint.

The first phase of MiCA enters in application on 30 June 2024² and will regulate the issuers of ARTs and of EMTs.

MiCA defines an ART as a crypto-asset that aims to maintain a stable value by referencing several currencies that are legal tender, one or several commodities, one or several crypto-assets, or a basket of such assets. Stablecoins typically fall within this definition. An EMT is defined under MiCA as a crypto-asset that is intended primarily as a means of payment and that aims to stabilize its value by referencing only one fiat currency, and that has a function that is very similar to the function of electronic money.

An issuer of an ART (ART Issuer) does not fall within the scope of MiCA if all the ARTs qualify as ‘financial instruments’ as defined in MiFID³. However, any ART Issuer making a public offer of ARTs that are not a financial instrument, or seeking the admission of such ARTs to trading within the EU, must be authorized in accordance with Article 21 of MiCA. Particularly, issuers of stablecoins offered in the EU would need to check to see whether they are required to seek authorization as an ART issuer.

Issuers making a small public offer of ARTs⁴, or an offer which is only addressed to qualified investors, are exempted from the authorization. Qualified investors under MiCA are per se professional clients in the meaning of MiFID⁵.

To become authorized, an ART Issuer must be have its registered office in the EU and file an application with the competent supervisory authority of its home member state. The application must include, amongst others, information on the ART Issuer’s management, its shareholders, and beneficial owners as well as on its program of operations and its business model. The applicant must also submit its policies and procedures including with respect to risk management and the safeguarding of data. The application must include a legal opinion stating that the ARTs do not qualify as crypto-assets excluded from the scope of MiCA or as EMTs which are separately regulated in MiCA.

ART Issuers are subject to capital and own funds’ requirements⁶ as well as to reporting requirements⁷. Specific requirements apply to ART Issuers engaging in a ‘significant issuance’ of ARTs. A ‘significant issuance’ is measured in terms of holders⁸, market value⁹ or number of transactions¹⁰.

An ART Issuer must establish a crypto-asset white paper providing, amongst others, information on the rights and obligations attached to the ART, the underlying technology, the risks related to the ARTs and the principal adverse impacts on the climate and other environment-related adverse impacts of the consensus mechanism used to issue the ARTs. The white paper must also disclose the reserve maintained by the ART Issuer for the ARTs¹¹.

There are transitional provisions for ART Issuers depending on whether they are credit institutions. ART Issuers (other than credit institutions) that have issued ARTs in accordance with applicable law before 30 June 2024, may continue to do so until they are granted or refused authorization pursuant to Article 21 of MiCA. This is provided that they apply for authorization before 30 July 2024. Credit institutions that have issued ARTs in accordance with applicable law before 30 June 2024 may continue to do so until the crypto-asset white paper has been approved or rejected pursuant to Article 17 of MiCA, if they notify their competent authority before 30 July 2024.

MiCA also regulates in its first phase any person who makes an offer to the public or seeks the admission to trade EMTs within the EU (the EMT Issuers). Only credit institutions and electronic money institutions that are authorized in the EU and that have submitted a crypto-asset white paper to the competent supervisory authority in the EU can be authorized as EMT Issuers¹².

1. Regulation (EU) 2023/1114 of 31 May 2023 on markets in crypto-assets, as amended.
2. Title III on asset-reference tokens and Title II on e-money tokens are applicable as of 30 June 2024.
3. Directive 2014/65/EU of 15 May 2014 on markets in financial instruments, as amended.
4. A small public offer is an offer where the average outstanding value of ARTs calculated at the end of each calendar day during a period of 12 months does not exceed €5 million.
5. Opt-up professional clients under Section I, points (1) to (4), of Annex II of MiFID cannot be qualified investors in the meaning of MiCA.
6. Article 35 requires an ART Issuer to have its own funds equal to an amount of at least the highest of (i) €350,000, (ii) 2 percent of the average amount of the reserve of assets, and (iii) a quarter of the fixed overheads of the preceding year.
7. Article 22 of MiCA.
8. [For a significant issuance, the number of holders of ART must be larger than 10 million.
9. The value of ARTs which are issued, its market capitalization or the size of the reserve of assets of the ART Issuer in respect of the issuance must higher than €5 billion.
10. he average number and average aggregate value of transactions in ART per day during the relevant period must be higher than 2.5 million transactions and €500 million respectively.
11. Article 36 of MiCA.
12. Article 48.1 of MiCA.