<h2 id="header-0"><strong>What is MiCA?</strong></h2><p><a href="https://listing.help/what-is-markets-in-crypto-assets-regulation-mica/" rel="noopener noreferrer nofollow">MiCA</a>,  short for “Markets in Crypto-Assets,” is a proposed set of regulations  for the crypto-asset market within the European Union. This regulatory  framework aims to standardize the rules for crypto-assets across EU  member states, addressing the unique risks these assets present.</p><p>The  regulations encompass a variety of crypto-assets, including  cryptocurrencies, utility tokens, and security tokens. They apply to  activities in both primary and secondary markets, covering issuance,  trading, and the safekeeping of crypto-assets. Additionally, MiCA sets  rules for certain service providers, such as trading platforms and  custodial wallet providers.</p><p>A  primary goal of MiCA is to safeguard investors and consumers who  interact with crypto-assets. The regulation mandates several protective  measures, including requirements for disclosure and transparency. It  also implements strategies to prevent money laundering and the financing  of terrorism.</p><h2 id="header-1"><strong>Asset-referenced token (ART) Definition</strong></h2><p>An  Asset-Referenced Token (ART) is a type of crypto-asset distinct from  electronic money tokens. It aims to maintain a stable value by linking  to another value, right, or a mix of both. This can include one or more  official currencies.</p><h2 id="header-2"><strong>Why Does It Matter?</strong></h2><p>Grasping  the differences in crypto-assets is vital because it influences their  regulatory treatment. E-Money Tokens and Asset-Referenced Tokens (ARTs),  designed for stability, are governed by different rules compared to  speculative crypto-assets like Bitcoin.</p><p>The  broad definition of ARTs under MiCAR is intended to keep pace with the  changing crypto environment. This flexibility allows for various  reference assets, resulting in some ARTs experiencing more price  fluctuations than others.</p><p>ARTs  are mainly intended for transactions rather than investments, which  means issuers and crypto-asset providers are not permitted to offer  interest on ART holdings.</p><h2 id="header-3"><strong>When Does a Token Have a Stable Value?</strong></h2><p>MiCAR  defines an Asset-Referenced Token (ART) based on whether it is designed  to maintain a stable value. Many types of tokens could potentially  qualify as ARTs because they reference various assets. This could  include tokens representing real-world objects, such as tokenized  collectible playing cards or other fungible items. However, for a token  to be classified as an ART, it must aim for value stability.</p><p>MiCAR  does not provide a clear definition of “stable value,” making it  unclear when a token meets this requirement. Simply linking a token’s  value to a real-world object is not sufficient. While the token’s value  can be determined by its reference object, it does not necessarily  ensure stability.</p><h2 id="header-4"><strong>Monitoring and Supervision of Asset-Referenced Tokens</strong></h2><p>Issuers  of Asset-Referenced Tokens (ARTs) must register an office within the  European Union (EU) to facilitate proper monitoring and supervision.  Public offerings of ARTs or applications for trading in the EU are  permitted only if the issuer has received authorization from the  competent authority and the corresponding crypto-asset white paper has  been approved.</p><p>However, this authorization is not required if:</p><p>1. The ARTs are exclusively for qualified investors, or</p><p>2. The public offering is below EUR 5,000,000.</p><p>Despite  these exceptions, a crypto white paper must still be prepared to inform  investors of potential risks, and the competent authorities must be  notified before the ART is offered to the public.</p><p>Authorized  credit institutions under Directive 2013/36/EU do not require  additional authorization under MiCA to trade ARTs. If the competent  authority believes that issuing a specific ART could jeopardize market  stability or financial systems, the application must be denied. In such  cases, the authority must inform the EBA, ESMA, ECB, and the central  bank of the jurisdiction if the issuer operates in a Member State not  using the euro.</p><h2 id="header-5"><strong>Responsibilities of Retail Holders and Issuers of Asset-Referenced Tokens</strong></h2><p>Issuers  and retail holders must provide ART holders with complete and  transparent information, avoiding misleading or unfair content. White  papers should detail how the ART is stabilized, including its peg,  reserve assets, custody arrangements, and holder rights.</p><p>Issuers are required to regularly update and publish the following on their website:</p><p>1. The number of ARTs in circulation,</p><p>2. The value and composition of the reserves,</p><p>3. Any events that could significantly affect the ARTs’ valuation or reserves.</p><p>Additionally,  retail holders and issuers must establish procedures for handling  complaints and act with integrity at all times. A policy to manage  conflicts of interest is also necessary.</p><p>A  robust governance structure with clear organizational frameworks and  transparent lines of responsibility must be in place to identify,  manage, monitor, and report risks. Management members must be free of  convictions related to money laundering or terrorist financing.  Similarly, shareholders or members with qualifying holdings must have no  such convictions.</p><p>Issuers  should allocate resources proportionate to their activities, ensure  operational continuity, and implement business continuity policies.  Strong internal controls and effective risk management procedures are  essential, along with maintaining the integrity and confidentiality of  information. These measures aim to protect token holders, particularly  retail investors, while ensuring smooth operations.</p><h2 id="header-6"><strong>Segregation of Assets</strong></h2><p>To  protect Asset-Referenced Tokens (ARTs) and preserve their value,  issuers must establish a robust custody policy for reserve assets. This  policy ensures that reserve assets are fully segregated from the  issuer’s own assets, cannot be encumbered or used as collateral, and are  readily accessible. Reserve assets can be held by a crypto-asset  service provider (CASP), an authorized credit institution under  Directive 2013/36/EU, or an investment firm under Directive 2014/65/EU.  Custody of physical assets may be delegated to another entity.  Custodians are responsible for any loss of reserve assets unless it is  due to an uncontrollable external event.</p><p>Holders  of ARTs have the right to redeem them at any time. The issuer must  fulfill redemption requests either by paying an amount equivalent to the  market value of the referenced assets or by delivering the assets  themselves. Holders must be able to redeem funds in a currency other  than electronic money, matching the currency used during the token sale.  The issuer is required to provide clear and easily understandable  information about redemption options.</p><p><img src="https://miro.medium.com/v2/resize:fit:700/0*4hMaJXuPMhC9RJhd" /></p><p>For more insights and updates on the crypto world, don’t forget to check out our blog at <a href="https://listing.help/blog" rel="noopener noreferrer nofollow">Listing.Help</a>.</p>

What is Asset-referenced Token (ART) under the MiCA Regulation?

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Sergei Khitrov

Další články publikované 24. 7. 2024

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