Since June 30, 2024, the German Financial Supervisory Authority BaFin has been overseeing issuers of ART (as per Title III of MiCAR) and EMT (as per Title IV of MiCAR), ensuring their compliance with the provisions of the MiCAR (Markets in Crypto-Assets Regulation).
Understanding ART and EMT (e-money)
ART signifies crypto values which are not e-money tokens. Their stability in value is maintained by referencing another value such as gold, another law, or a combination of both (commonly known as asset-referenced tokens or ART). Conversely, EMT (e-money tokens, briefly EMT) are tokens whose stability is tied to an official currency. They are recognized as e-money. In simple terms, both EMT and ART are regulated as “Stablecoins”.
Issuance, licensing, and whitepaper
Issuers of ART must have their headquarters within the EU and be approved by their respective national supervisory authority. EMT issuers must be recognized as an e-money institute or CRR credit institution. Both ART and EMT issuers are required to produce a whitepaper, submit it to the relevant supervisory authorities, and make it public. A whitepaper is a simple, comprehensive summary of vital information about the issuer and the issued cryptocurrency.
Capital requirements, asset reserves, interest restrictions, and repurchase obligations
ART issuers are obligated to maintain an asset reserve that mitigates the risks associated with the assets to which the ART refers. A readily available liquidity reserve is particularly important to ensure that customers can reclaim their deposited money at any time, for instance, at the asset’s market value to which the ART refers. For EMT issuers, there is a restriction on offering interest in relation to the EMT. They must also be capable of repaying the holder of an e-money token the contractual nominal value of the token in the respective official currency at all times. In simpler terms, anyone who purchased a token for one Euro is entitled to reclaim this Euro at any given moment.
Here’s how we can assist you:
MiCAR licensing procedure as an e-money institute or CRR credit institution
We evaluate whether your business project falls under licensing or permission reservation and conduct the MiCAR licensing process or the permission procedure as an e-money Institute or as a CRR credit institute on your behalf. We prepare the necessary documentation and the whitepaper for you.
In case of unsuccessful transition to MiCAR
Many projects become unviable due to MiCAR requirements and must be terminated. In such a scenario, it’s crucial to promptly engage a lawyer specializing in all legal aspects related to cryptocurrencies, who can discuss your options and offer comprehensive advice on all arising legal questions. Our team of blockchain experts, attorneys, and tax advisors will examine your business model and your options. We devise the best exit strategy for you and support you in professionally winding up your business operations. We consider all arising legal questions, including liability issues, tax consequences, and criminal responsibility, and take over communication with the relevant authorities.
We determine the costs based on effort. Following an initial consultation, which is chargeable, we’re ready to provide you with an individual offer.
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