July 21, 2024
EU Proposes Draft Rules for Addressing Stablecoin Issuer Complaints
Altcoins News

EU Proposes Draft Rules for Addressing Stablecoin Issuer Complaints

The European Union (EU) has taken a significant step towards enhancing regulation in the realm of stablecoins. In a collaborative effort between the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA), draft regulatory standards for stablecoin issuers dealing with complaints have been unveiled under the Markets in Crypto-Assets (MiCA) regulatory framework.

Guidelines for Efficient Complaint Resolution

The Regulatory Technical Standards (RTS), issued on March 13, outline protocols aimed at efficiently and fairly resolving complaints by asset reference token (ART) holders. These guidelines delineate the procedures and standards that stablecoin issuers must adhere to in effectively managing complaints.

According to the EBA, the objective of this framework is to foster innovation and fair competition while ensuring a high level of protection for retail holders and the integrity of crypto asset markets.

Collaborative Development and Approval Process

The development of this regulatory framework for stablecoins stems from extensive collaboration between the EBA and ESMA. Consultations were conducted between July and October 2023 to gather insights and perspectives from relevant stakeholders.

The framework is now slated for submission to the European Commission for approval by the end of June. Following approval, it will undergo scrutiny by the European Parliament and the European Council before being officially published in the Official Journal of the European Union.

Differentiation of Stablecoin Categories

Under the MiCA regulatory framework, stablecoins that can be linked to multiple fiat currencies or other assets, including cryptocurrencies, are categorized as ARTs. This categorization distinguishes them from stablecoins pegged solely to the value of a single currency, such as the euro or dollar.

Addressing Systemic Concerns and Ensuring Oversight

The push for enhanced oversight of stablecoins gained momentum following the collapse of Terra’s UST, which raised concerns about potential systemic implications. Prior to this initiative, the EU had been actively monitoring stablecoins through the MiCA regulation.

Additionally, the MiCA legislation includes provisions mandating rigorous screening of shareholders and board members for crypto asset service providers (CASPs). These measures aim to authorize CASPs while ensuring the separation of customer assets and trading, mitigating risks associated with commingling of funds.

Anticipated Implementation and Comprehensive Framework

The full implementation of the MiCA legislation is expected by December, with stablecoin regulation scheduled for launch in the summer. This legislative framework seeks to establish a comprehensive regulatory framework encompassing crypto issuers, service providers, and users within the EU.

Image by Rob Grant from Pixabay

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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