The European Banking Authority (EBA) has published “guidelines” for stablecoin issuers as part of the regulatory framework MiCA.
The document calls on companies to prepare businesses to comply with the legislation approved on April 20, 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 says.
According to the regulator’s proposal, organizations issuing “stable coins” need 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 have sufficient reserves;
- register with the EBA.
The agency noted that the recommendations for issuers are still voluntary, but investor protection is not guaranteed before the law comes into force.
“Consumers are reminded that prior to the entry into force of the MiCA, stablecoins and e-money tokens are not regulated instruments and therefore consumers do not yet enjoy the rights and protections set out in it,” the EBA added.
Earlier, the chairman of the Authority, José Manuel Campa, said that the upcoming legal regulations will focus on the diversity of stablecoins’ backing. He emphasized the importance of issuers eliminating conflicts of interest, as well as displaying the relationship of vaults to trading platforms.
Recall that in May Campa proposed to give central banks the right to ban “stable coins”. In his opinion, the Central Bank should be able to limit the widespread adoption of large stablecoins if they affect the goals of public policy.
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