EBA launches consultation on redemption guidelines for crypto tokens

The consultation particularly refers to a case in which the issuer fails to meet its obligations under the Markets in Crypto Assets Regulation (MiCAR). These guidelines outline the contents of the redemption plan, review timeframe, and activation triggers, and are aimed at issuers of asset-referenced tokens (ART) and e-money tokens (EMT), as well as competent authorities under MiCAR. The consultation period will remain open until 10 June 2024. 

The main points from the draft guidelines include: 

• Explanation of fundamental principles governing the redemption plan, such as equitable treatment of token holders, and delineation of steps for orderly implementation, encompassing communication strategies, redemption claim content, and distribution plans.
• Coverage of scenarios involving pooled issuance, where a single token is issued by multiple entities. 
• Identification of triggers for activating the plan by the competent authority, along with coordination with prudential and resolution authorities. 

The consultation process allows stakeholders to submit their comments through the EBA's consultation page until the deadline. Additionally, a virtual public hearing is scheduled for 22 May 2024 from 14:00 to 16:00 Paris time, for interested parties to engage with the consultation process. Registration is required by 17 May 2024 and dial-in details will be provided to registered participants. 

All received contributions will be made public after the consultation concludes unless confidentiality is requested. The draft Guidelines on redemption plans are developed by the EBA based on the mandate outlined in Article 47(5) of MiCAR, covering issuers of e-money tokens as applicable, pursuant to the cross-reference in Article 55 MiCAR.

Background information for these guidelines

Regulation (EU) 2023/1114 on Markets in Crypto-assets (MiCAR) establishes a regulatory framework for crypto-asset issuance and service provision in the European Union (EU). Effective from 29 June 2023, provisions related to ARTs and EMTs will come into force on 30 June 2024. 

MiCAR encompasses activities such as offering to the public or seeking trading admission of ARTs and EMTs, with the EBA tasked with supervising significant ARTs and EMTs. Additionally, the EBA is mandated to develop technical standards and guidelines under MiCAR, including joint mandates with ESMA and, in one instance, with the European Insurance and Occupational Pensions Authority (EIOPA).