If you are planning to issue Asset Referenced Tokens (ARTs) or E-Money Tokens (EMTs) or for their admission to trading on a trading platform for crypto-assets, then from 30 June 2024 the rules of the Markets in Crypto-Assets Regulation (MiCAR)[1] must be observed. Details about the background, objective as well as the general regulatory content of MiCAR can be found under the following link on the Financial Market Authority’s website.
The following graphic provides an overview of the timeline and future milestones for MiCAR implementation, until MiCAR becomes fully applicable:
The European Banking Authority (EBA) is recommending companies to make preparations for MiCAR in a timely manner and has published the following communication. To simplify preparations regarding the potential issuance of Asset Referenced Tokens or E-Money Tokens and their admission to trading on a trading platform for crypto-assets, there is a list of useful points for potential issuers below. The list should not however be considered as exhaustive.
MiCAR defines itself as what is known as a secondary regime. This means that the Regulation does not apply for crypto-assets falling under the exemption set out in Article 2 (4) MiCAR. The exemptions include financial instruments as well as deposits that fall under their own supervisory regimes (e.g. the Securities Supervision Act (WAG; Wertpapieraufsichtsgesetz), the Banking Act (BWG; Bankwesengesetz) or the Deposit Guarantee and Investor Compensation Act (ESAEG; Einlagensicherungs- und Anlegerentschädigungsgesetz)
MiCAR chooses a technology-specific term for crypto-assets and defines them as a digital representation of a value or of a right that are able to be transferred and stored electronically using distributed ledger technology or similar technology.
One of the regulatory focuses of MiCAR is on products that are commonly called “stable coins” on the market. These are crypto-assets with the objective of maintaining a stable price by means of pricing mechanisms, by referencing them against an official currency or specific assets or rights.
Depending on the asset or right that is referenced, MiCAR differentiates between:
- EMTs: This is a crypto-asset, the value of which purports to be maintained by referencing the value of one official currency (Article 3 (1) point 7 MiCAR);
- ARTs: This is a crypto-asset, that is not an EMT, and the value of which purports to be maintained by referencing another value or right or a combination thereof, including one or more official currencies (Article 3 (1) point 6 MiCAR);
- Crypto-assets that are neither ARTs nor EMTs and which also do not fall under MiCAR’s catalogue of exclusions.
Potential issuers are required to conduct an authorisation procedure prior to issuing ARTs. It must be ensured that the issuer is a legal person established in the European Union or another undertaking authorised in the European Union (Article 16 in conjunction with Article 20 MiCAR). The authorisation procedure is initiated by means of an application in accordance with Article 18 MiCAR.
In addition, potential issuers are required to publish a crypto-asset white paper in accordance with Article 19 MiCAR. The crypto-asset white paper must be approved prior to publication during the authorisation procedure and must therefore be submitted together with the application for authorisation.
Under Article 16 (2) MiCAR, an application for authorisation is not required, if:
- over a period of 12 months, calculated at the end of each calendar day, the average outstanding value of the ART issued by an issuer never exceeds EUR 5,000,000, or the equivalent amount in another official currency, and the issuer is not linked to a network of other exempt issuers; or
- the offer to the public of the ART is addressed solely to qualified investors and the ART can only be held by such qualified investors.
Even in the case of an application for authorisation not being required to be made, a crypto-asset white paper in accordance with Article 19 MiCAR in any case must be prepared and submitted to the FMA.
Credit institutions as defined in Article 3 (1) point 28 MiCAR are able ex lege to issue ARTs, and therefore are not required to conduct an approval procedure. However, credit institutions in any case are required to prepare a crypto-asset white paper in accordance with Article 19 MiCAR and submit it to the FMA. Pursuant to Article 17 (1) lit. a MiCAR, this crypto-asset white paper must be approved by the FMA.
In addition to the authorisation for issuing ARTs and the publication of a crypto-asset white paper, a range of further obligations and requirements also apply for issuers of ARTs in accordance with Title III in the MiCAR. These comprise in particular:
- Reporting, notification, and disclosure obligations
- Marketing communications
- Establishing complaints-handling procedures for complaints by holders of ARTs
- Governance arrangements
- Own funds requirements
- Holding a reserve of assets, as well as the investment, management, and custody of this reserve of assets
- Drawing up of recovery and redemption plans
EBA decides by means of a decision whether it classifies ARTs as significant ARTs in the case of the thresholds listed in Article 43 MiCAR being exceeded. Supervisory responsibilities with respect to the issuer shall be transferred from the FMA to EBA within 20 working days of the date of notification of the decision, where EBA determines that a significant ART exists.
Under Article 81 (1) MiCAR, only credit institutions or electronic money institutions shall be allowed to issue EMTs. Since EMTs are classified ex lege as electronic money, Titles II and III of the Electronic Money Directive (EMD)[1] must also be observed. In Austria, Titles II and III EMD are transposed by the Electronic Money Act (E-Geldgesetz).
There is no authorisation procedure stipulated for issuers of EMTs, instead only a notification to the FMA is necessary (Article 48 (6) MiCAR)
In addition, Article 51 MiCAR requires a white paper to be published.
[1] Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money.
In addition to the authorisation for issuing ARTs and the publication of a crypto-asset white paper, a range of further obligations and requirements also apply for issuers of ARTs in accordance with Title IV of the MiCAR. These comprise in particular:
- Reporting, notification, and disclosure obligations
- Issuance and redemption obligations
- Marketing communications
- Holding a reserve of assets, as well as the investment, management, and custody of this reserve of assets
- Drawing up of recovery and redemption plans
Where the thresholds stated in Article 43 in conjunction with Article 56 MiCAR are exceeded, EBA shall classify the EMT as a significant EMT by means of a decision. In accordance with Article 117 (4) MiCAR, supervisory responsibilities with respect to the issuer of significant EMTs shall be transferred to EBA within 20 working days of the date of notification of the decision.
Since every EMT ex lege constitutes electronic money, the crypto-asset may be used pursuant to Article 1 para. 1 of the Electronic Money Act) for the purpose of conducting payment transactions as defined in the Payment Services Act 2018 (ZaDiG 2018; Zahlungsdienstegesetz 2018). Whether the supervisory regime set out in ZaDiG 2018 also applies must therefore be reviewed on a case-by-case basis.
The FMA refers applicants in relation to the issuing of ARTs or EMTs to their respective obligations in relation to the prevention of money laundering and terrorist financing under the Financial Markets Anti-Money Laundering Act (FM-GwG; Finanzmarkt-Geldwäschegesetz) including Regulation (EU) 2023/1113. These obligations include the obligation to identify and evaluate risks of money laundering and terrorist financing regarding new products, practices, and technologies, which in all cases shall be required to take place prior to their respective introduction (Article 4 para. 1 FM-GwG).
Issuers of ARTs that do not hold an authorisation as a credit institution, shall ensure where cooperation arrangements with specific crypto-asset service providers exist, that these have the respective policy and procedures in place for their internal control mechanisms, to ensure compliance with the obligations in accordance with the Anti-Money Laundering Directive – Directive (EU) 2015/849 including Regulation (EU) 2023/1113 (Article 18 (2) point g MiCAR).
If you have legal questions to the Financial Market Authority (FMA) and are specifically planning to issue an ART/EMT, or are already an issuer of one, please contact:
For legal questions regarding Asset Referenced Tokens (ARTs) please send an e-mail to: [email protected]
For legal questions regarding E-Money Tokens (EMTs) please send an e-mail to: [email protected]
[1] Regulation (EU) 2023/1114 on markets in crypto-assets (Markets in Crypto-Assets Regulation – MiCAR).