As part of its digital finance package, in September 2020 the European Commission (EC) published its proposed Regulation on crypto-asset markets with the aim of laying the basis for a European approach that will foster technological development and ensure financial stability and consumer protection. The final draft of this Regulation was approved by the European Parliament (EP) and the Council in May 2023.
Regulation on markets in crypto-assets
Executive summary
The EP and Council have adopted in May 2023 Regulation on markets in crypto-assets, for the first time setting a European Union (EU) level legal framework for this sector. This Regulation covers asset-referenced tokens, e-money tokens and other crypto-assets.
Main Content
This Technical Note summarises the main content of the Regulation, defining the regulatory requirements by type of crypto-asset, as well as the requirements crypto-asset service providers need to meet to be able to undertake their activity. In this way, different levels of requirements are established:
- Requirements are established for offering different types of crypto-assets to the public. Thus, asset-backed tokens (ART) must be backed by a legal person or a credit institution, electronic money tokens (EMT) by a credit institution or electronic money institution, while all other types of crypto-assets must be backed by a legal person.
- An information document (white paper) must be created and published for all crypto-assets covered by this Regulation. For referenced tokens, the white paper must also be approved by a National Authority.
- For ARTs and MSEs, measures must be provided for any issues related to the asset pool. ARTs also require a plan for the orderly redemption of tokens.
- ARTs and MTEs must have their own funds and their holders are entitled to redemption at market value for the former and face value for the latter.
Download the technical note on Regulation on markets in crypto-assets.