The European Union publishes draft rules for stablecoin issuer complaint procedures

EU (EU) financial regulators want to add more stablecoin regulation guidelines to the regulatory framework for markets in crypto-assets (MiCA) by publishing draft regulatory standards for stablecoin issuers amid complaints.

Regulatory Technical Standards (RTS) released protocols on March 13 to efficiently and fairly resolve complaints by Asset Reference Token (ART) holders. These guidelines outline procedures and standards for stablecoin issuers to effectively handle complaints.

A European Banking Authority (EBA) document says:

“Such a framework should support innovation and fair competition while ensuring greater protection for retail owners and market integrity in crypto assets.”

According to the EBA, this scientific framework is the result of a joint collaboration between the EBA and the European Union's market regulator, the European Securities and Markets Authority (ESMA). Both parties held consultations between July and October 2023.

This regulatory framework is to be submitted to the European Commission for approval at the end of June. Subsequently, these standards are reviewed by the European Parliament and the European Council before being published in the Official Journal of the European Union, the Union's repository of existing legislation.

Related: EU Banking Authority Extends Anti-Money Laundering Directive to Crypto

MiCA's regulatory framework within the block allocates a stablecoin that can be linked to multiple fiat currencies or other assets, including cryptocurrencies, according to Artis. This is different from a stablecoin that is pegged only to the value of a single currency, such as the euro or dollar.

In the past, the EU actively monitored stablecoins through the MCA regulation. The push for stablecoin regulation became imperative after the collapse of Terra UST, which raised concerns about systemic implications. Independently, the EBA has previously suggested regulations for stablecoin issuers.

Another provision in the MiCA Act mandates stricter scrutiny of shareholders and board members for crypto asset service providers (CASPs). These regulations seek to allow CASPs when verifying customer assets and transactions. The goal is to keep client and company money out of reach, as in the case of FTX.

Full implementation of MiCA is expected in December and stablecoin regulation is scheduled to begin in the summer. The MiCA Act seeks to establish a comprehensive framework for crypto issuers, service providers and users.

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