Regulator: European Banking Authority (EBA), European Securities and Markets Authority (ESMA) & National Regulators
Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets, and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010, and Directives 2013/36/EU and (EU) 2019/1937.
The regulation is unofficially called Markets in Crypto-Assets (MiCA) or Markets in Crypto-Assets Regulation (MiCAR) for short.
MiCAR implements a categorical prohibition on yield-bearing stablecoins at both the issuer and service provider levels. This represents a fundamental policy departure from traditional e-money directives and has triggered significant market realignment.
MiCAR grants unconditional redemption rights to all token holders on demand. The framework distinguishes between e-money tokens and asset-referenced tokens while establishing clear fee principles:
For E-Money Tokens (Article 49):
* EMT issuers must redeem tokens "on request" at par value in non-electronic money (cash or credit transfers). Redemption is typically fee-free, with limited exceptions specified in Article 46.
* The redemption obligation applies at all times, including during stress scenarios, ensuring equity among all token holders regardless of when they acquired or attempt to redeem their holdings.
For Asset-Referenced Tokens (Article 39):
* ART holders maintain a claim against issuers for redemption at market value of the referenced assets (not par value), or by delivery of the underlying assets themselves. Like EMTs, this redemption right is unconditional and continuous.
Unlike redemption restrictions, MiCAR contains no explicit prohibition on issuance fees, meaning stablecoin issuers may charge fees when tokens are created or purchased. However, any such fees must be:
* Transparent and disclosed to users
* Non-discriminatory among buyers
* Clearly itemized in whitepapers and terms of service
Applicable Laws:
MiCAR - Markets in Crypto-Assets Regulation - https://www.centralbank.ie/regulation/markets-in-crypto-assets-regulation
