This chapter analyses the regime applicable to stablecoins referencing one official currency–– the e-money tokens––under the Markets in Crypto-Assets Regulation (MiCAR). The analysis highlights the dual nature of e-money tokens, which are characterised both as a type of crypto-assets and as electronic money. From this dual nature stems a complex interplay between MiCAR’s bespoke provisions and the existing framework for electronic money and payment services. The chapter explores in detail the licensing requirements, substantive obligations, and prudential safeguards applicable to issuers of e-money tokens, including the stricter regime for significant issuers. Finally, it addresses the challenges of extraterritoriality, and the mechanisms designed to preserve EU monetary sovereignty, particularly in relation to non-MiCAR compliant stablecoins and non-euro denominated e-money tokens. The analysis contributes to a broader understanding of how EU financial regulation adapts to the evolving landscape of digital private money.

Read the entire article here: https://ssrn.com/abstract=5371861 or https://dx.doi.org/10.2139/ssrn.5371861.