As mandated by the recently adopted Markets in Crypto-Assets (MiCA) policy, the European Banking Authority published draft guidance for stablecoin issuers on Wednesday, with the proposal outlining stablecoins, which the regulator calls asset-referenced tokens (ARTs), and How issuers of other cryptocurrencies should structure their risk management and recovery plans.
“All issuers should include a decoupling risk indicator designed to track the consistency between the market price of the token and the market value of the reference asset,” the draft reads.
The regulator stipulates that in response to “adverse circumstances” that may affect the company’s compliance with regulatory standards, appropriate measures must be put in place to ensure that token holders are adequately compensated.
The EBA recommends that issuers should include at least one recovery option that strengthens their capital position and one recovery option designed to improve the issuer’s liquidity position.
The consultation period for the consultation draft will end on February 8, and the EBA also invites interested parties to attend a public hearing on January 30.