The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) Jointly Publish Draft Guidelines
The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) have released a joint consultation paper containing two draft guidelines. The guidelines cover the authorization process for asset-referenced tokens (ARTs) and crypto-asset service providers (CASPs), as well as prudential assessments for potential acquisitions.
The draft guidelines focus on evaluating the suitability of individuals serving on management teams, shareholders, and individuals with significant holdings in companies that issue ARTs and CASPs. They establish standardized criteria for assessing knowledge, skills, experience, integrity, and commitment to their roles.
These guidelines aim to provide clear and consistent criteria for assessing suitability in order to reduce differences in rule application and potential rule exploitation. They are being issued in accordance with the Markets in Crypto-Assets Regulation (MiCA), which is set to enter into force in 2024.
The consultation period for these guidelines will remain open until January 22, 2024, allowing stakeholders to provide feedback before the finalization of the guidelines by EBA and ESMA.
EU Banking Watchdog Encourages Responsible Stablecoin Practices Ahead of MiCA Implementation
In July, the European Union’s banking watchdog urged stablecoin issuers to voluntarily adhere to specific “guiding principles” related to risk management and consumer protection. The EBA also introduced initial measures for public feedback aimed at clarifying provisions in the MiCA.
During this time, the EBA announced plans to release a second set of draft guidelines in October addressing the capital needs of stablecoin issuers and how businesses should handle stablecoin redemptions in volatile markets.
EBA and ESMA are currently seeking input and feedback on the two draft guidelines during a three-month consultation period. The final versions of these guidelines are expected to be released when the MiCA regulation comes into effect.
Hot Take: Ensuring Consistency and Transparency in the Crypto Industry
The joint publication of draft guidelines by the EBA and ESMA is a significant step towards ensuring consistency and transparency within the crypto industry. By establishing clear criteria for assessing suitability, these guidelines aim to reduce differences in rule application and potential rule exploitation.
The consultation period allows stakeholders to provide valuable feedback, ensuring that the final guidelines are well-rounded and consider multiple perspectives. With the implementation of MiCA on the horizon, these guidelines will play a crucial role in shaping the regulatory framework for crypto-assets in the European Union.
Overall, this collaborative effort between regulatory authorities demonstrates a commitment to responsible practices and consumer protection in the rapidly evolving crypto landscape.
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