EBA Consults on Redemption Guidelines for Crypto Tokens

The European Banking Authority (EBA) has initiated a consultation on the guidelines for the orderly redemption of asset-referenced or e-money tokens.

The consultation particularly refers to a case in which the issuer fails to meet its obligations under the Markets in Crypto Assets Regulation (MiCAR). These guidelines outline the contents of the redemption plan, review timeframe, and activation triggers, and are aimed at issuers of asset-referenced tokens (ART) and e-money tokens (EMT), as well as competent authorities under MiCAR. The consultation period will remain open until 10 June 2024. 

The main points from the draft guidelines include: 

• Explanation of fundamental principles governing the redemption plan, such as equitable treatment of token holders, and delineation of steps for orderly implementation, encompassing communication strategies, redemption claim content, and distribution plans.

• Coverage of scenarios involving pooled issuance, where a single token is issued by multiple entities. 

• Identification of triggers for activating the plan by the competent authority, along with coordination with prudential and resolution authorities. 

The consultation process allows stakeholders to submit their comments through the EBA's consultation page until the deadline. Additionally, a virtual public hearing is scheduled for 22 May 2024 from 14:00 to 16:00 Paris time.

All received contributions will be made public after the consultation concludes unless confidentiality is requested, notes EBA.

(Source: The Paypers)