EU Body Publishes Final Draft Technical Standards for Prudential Matters: MiCA

As a researcher with extensive experience in European financial regulations, I am closely monitoring the developments surrounding the MiCA legislation and the finalization of the technical standards by the European Banking Authority (EBA). The publication of these draft technical standards marks an important step forward in establishing a robust regulatory framework for the crypto sector in Europe.

The European Banking Authority (EBA) released the final version of the regulatory guidelines on prudential issues for businesses to implement in accordance with the Markets in Crypto Assets (MiCA) law, which they made public on Thursday.

Last year, the comprehensive regulatory framework for the cryptocurrency industry, known as MiCA, was enacted. This legislation applies to both crypto businesses and issuers of stablecoins.

The European Banking Authority’s standards establish the conditions for designing stress tests and specify the necessary liquidity reserves for assets, in addition to requiring issuers to prepare a recovery plan and other elements.

“The creators of asset-linked tokens must perform rigorous stress tests using likely financial distress situations. Regulators have the authority to raise an issuer’s capital buffer depending on the risk assessment and stress test outcomes.”

As a crypto investor, I’ve closely collaborated with the European Union bloc, including ESMA and the ECB, in creating the draft technical standards for our industry.