The European Banking Authority (EBA) has published “guidelines” for stablecoin issuers as part of the MiCA regulatory framework. The document calls on companies to prepare businesses to comply with the legislation, which will come into force on June 30, 2024.
“The announcement is intended to encourage timely preparatory action for MiCA to mitigate the risks of potentially disruptive and disruptive business model changes at a later stage, as well as to promote convergence with regulators and ensure consumer protection,” the press release said.
According to the proposal of the regulator, organizations issuing stablecoins are required to:
- ensure full disclosure of information to clients;
- present a public business model;
- establish an effective management system, including risk management;
- establish a buyout mechanism and sufficient reserves;
- register with the EBA.
The recommendations are still voluntary, but before the law comes into force, protection of investors is not guaranteed either. The EBA emphasized that “prior to the entry into force of the MiCA, stablecoins and e-money tokens are not regulated instruments, therefore consumers do not yet enjoy the rights and protections set out in it.”
Earlier, the head of the EBA, Jose Manuel Campa, said that future legal regulations will focus on the diversity of stablecoins’ backing. He noted the importance of issuers eliminating conflicts of interest, as well as reflecting the relationship of vaults to trading platforms.