France's Autorité de contrôle prudentiel et de résolution (ACPR), the country's banking and insurance supervisor, has asked in 2024 the European Banking Authority to establish whether it would be possible to have technically identical and fully fungible EMTs issued by both an entity licensed in the European Union and by another elsewhere, not subject to EU rules.
The EBA then turned the initiative over to the EU Commission as it represents a matter of interpretation of EU law.
The EU adopted an extensive set of rules for crypto assets, known as MiCAR, in 2023, under which issuers of EMTs must receive supervisory clearance in order to operate and hold reserves, including things such as bank deposits, against tokens sold to ensure they can repay investors when required to.
In the US, customers and businesses expect the government to ease the regulatory burden faced by cryptocurrency companies, with the US Securities and Exchange Commission recently creating a task force to work on new rules. At the same time, some issuers operate both within and outside the EU.
France's ACPR also asked whether it would be possible to allow only EU customers to present redemption requests to the EU-based entity, in the case of identical EMT issuance both within and outside the region of the EU. At the same time, ACPR declined to make any further comments.
According to officials, the MiCAR regulation was developed in order to have flexibility built in to avoid stifling optimisation and growth. In addition, to start interpreting the rules in ways that have not been clearly spelled out in the text could engender risks, as well as weaken the effectiveness of the newly minted rules.
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