The EBA and ESMA release initial consultations on MiCA

The European Supervisory Authorities provide issuers of stablecoins and CASPs with more details on forthcoming tasks for authorisation applications, complaints handling and disclosing conflicts of interest.


On 12 July 2023, the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) issued consultation packages for Level 2 standards, detailed binding rules that will complement the Markets in Crypto-Assets (MiCA) Regulation. These measures consist of Regulatory Technical Standards (RTS), which outline necessary tasks to comply with the law, and Implementing Technical Standards (ITS), which indicate how to carry out those tasks.

ESMA’s first consultation for CASPs

The ESMA’s first consultation paper on Technical Standards specifying certain requirements of MiCA covers:

  • the form and content of notifications that specified financial entities must submit to the national competent authority (NCA) if they are providing crypto-asset services;
  • the form and content of the application for authorisation as a crypto-asset service provider (CASP) to the NCA;
  • templates and procedures that CASPs must adopt to handle complaints from clients;
  • policies and procedures that CASPs must adopt in order to identify, prevent, manage and disclose conflicts of interest;
  • standards and methodology that an NCA should apply when assessing the proposed acquisition of a CASP by investors.

ESMA is inviting stakeholders to submit their observations until 20 September 2023.

However, this is only ESMA’s first consultation package. The second consultation package is expected to be published by October 2023 and will cover:

  • environmental sustainability indicators,
  • business continuity requirements,
  • trade transparency data and order book record-keeping,
  • record-keeping requirements for CASPs,
  • classification and templates and format of crypto-asset white papers, and
  • public disclosure of inside information.

The third consultation package will be published in Q1 2024 and is intended to cover:

  • qualification of crypto-assets as financial instruments,
  • monitoring, detection, and notification of market abuse,
  • investor protection,
  • reverse solicitation,
  • suitability of advice and portfolio management services to clients,
  • policies and procedures for crypto-asset transfer services, including clients’ rights, and
  • system resilience and security access protocols.

EBA’s consultation package for ARTs

The EBA’s consultation package for issuers of asset-referenced tokens (ARTs) under MiCA consists of two consultation papers covering draft Technical Standards on complaints handling procedures and EU market access. The latter proposes requirements for firms seeking authorisation to offer ARTs to the public or admit ARTs to trading, which include information on:

  • the business model,
  • internal governance,
  • information and communications technology (ICT) risk management,
  • liquidity,
  • reserve of assets, and
  • the sufficiently good repute of the members of the management body and shareholders.

The deadline for the submission of comments is 12 October 2023.

Separately, the EBA has also stated that firms already issuing ARTs or electronic money tokens (EMTs) before the 30 June 2024 authorisation deadline should take steps to prepare.

What's next

ESMA has indicated that one of the aims of the consultation process is to gain a better understanding of the crypto industry's expected turnover, like the number of white papers that will be published and how the use of distributed ledger technology (DLT) for transactions (on-chain trading) will compare to the use of other systems (off-chain trading).

Although the Technical Standards remain out for consultation and subject to further amendments, we expect much of what has been proposed by the European Supervisory Authorities (ESAs) in the initial drafts to be formalised over the next six to 12 months. The requirements provide CASPs and issuers with a good indication of what to prepare for.

XReg will release a concise, detailed report outlining the impact of these requirements for CASPs and issuers. To get caught up, watch our webinar on everything that’s coming in Level 2 measures.