EU to Introduce Stablecoin Technical Standards by End of 2024

The European Banking Authority (EBA) is on track to finalise and publish technical standards for stablecoin issuers by the end of 2024. This initiative is part of the broader Markets in Crypto-Assets (MiCA) framework, designed to provide a comprehensive regulatory approach to the rapidly expanding crypto sector.

Scope and Focus of the Standards

These standards will address several critical areas:

• Authorization: Outlining the requirements for stablecoin issuers to obtain and maintain proper authorisation.
• Stress Testing: Mandating regular tests to ensure that issuers can withstand financial pressures.
• Transaction and Value Estimation: Providing methods for accurately estimating the volumes of transactions and the value of the assets.

The standards aim to bring stability and predictability to the market by ensuring that stablecoin issuers adhere to rigorous regulatory practices.

Read more: Sony Bank and Soneium Join Forces to Create a Yen-Stablecoin - What This Means for Crypto

EBA and ESMA Submit 15 Technical Standards for EU Review: What’s Next?

The EBA and the European Securities and Markets Authority (ESMA) have submitted 15 technical standards to the European Commission for review. The Commission will evaluate these standards and decide whether to approve them as they are or recommend modifications. Following the Commission's decision, the standards will be scrutinised further by the European Parliament and the European Council. They will also need to be translated into official languages and formally adopted before being published in the EU Official Journal.

EBA and ESMA Finalise Technical Standards for EU Stablecoin Regulation: What’s Next for Crypto Companies?

The EBA's draft guidance on these standards was initially released for public comment in July 2023. A final draft of the technical standards, developed in collaboration with ESMA, was published in March 2024. The completion and publication of these standards will mark a significant step in regulating the stablecoin sector within the EU.

The MiCA regulations are expected to streamline operations for crypto companies across the EU’s 27 member states. By providing a single licensing framework, the regulations aim to simplify compliance and enhance regulatory clarity, facilitating smoother operations within the single market.

Read more: Mastercard Partners With Mercuryo To Launch Euro Crypto Debit Card

While the forthcoming regulations are set to improve oversight and streamline operations for the crypto industry, the lengthy approval and adoption process may delay their practical implementation and impact on the market.