The Markets in Crypto-Assets Regulation creates the world’s most detailed regulatory framework for stablecoins, establishing two distinct categories with separate compliance regimes: e-money tokens (EMTs) and asset-referenced tokens (ARTs). The framework has been fully applicable since June 30, 2024, for stablecoin-specific provisions, and any entity issuing or seeking to issue stablecoins targeting EU customers must comply with the applicable EMT or ART requirements. Non-compliance carries penalties of up to 5% of annual turnover for legal entities.
EMT vs. ART Classification
E-Money Tokens (EMTs)
An EMT is a crypto-asset that purports to maintain a stable value by referencing the value of one official currency. Under MiCA:
- EMTs are functionally equivalent to electronic money in crypto-asset form
- They are subject to the E-Money Directive (EMD2) framework as adapted by MiCA
- Only authorized credit institutions or authorized electronic money institutions can issue EMTs
- USDC (Euro-denominated), Societe Generale’s EUR CoinVertible, and similar single-currency stablecoins are EMTs
Key distinguishing feature: Single official currency reference.
Asset-Referenced Tokens (ARTs)
An ART is a crypto-asset that purports to maintain a stable value by referencing another value or right, or a combination thereof, including one or more official currencies. Under MiCA:
- ARTs include multi-currency stablecoins, commodity-backed stablecoins, and tokens referencing baskets of assets
- ARTs require a specific MiCA authorization (not an e-money or banking license)
- The issuer must be a legal entity established in the EU
- Tokens like Facebook’s original Libra concept (multi-currency basket) would be ARTs
Key distinguishing feature: Multi-asset reference or non-currency reference.
EMT Authorization and Compliance
Who Can Issue EMTs
Only two categories of entities may issue EMTs in the EU:
- Authorized credit institutions (banks) licensed under the Capital Requirements Directive
- Authorized electronic money institutions licensed under the Electronic Money Directive (EMD2)
EMT-Specific Requirements
Redemption Rights:
- Holders have the right to redeem EMTs at par value at any time
- Redemption must be in the reference currency (e.g., EUR for a EUR-denominated EMT)
- No minimum redemption threshold may be imposed
- Redemption must be free of charge or with clearly disclosed and proportionate fees
- The issuer must have adequate systems to handle redemption requests promptly
Reserve of Funds:
- EMT issuers must safeguard the funds received in exchange for EMTs
- Funds must be placed in a separate account at a credit institution or invested in secure, low-risk assets
- For significant EMTs: at least 30% of funds must be deposited at credit institutions with appropriate diversification
- Reserves cannot be lent, pledged, or used as collateral
Whitepaper:
- EMT issuers must publish a crypto-asset whitepaper
- The whitepaper must be notified to the NCA at least 20 working days before publication
- Content requirements include: description of the issuer, description of the EMT, rights and obligations, underlying technology, risks, and reserve composition
- The issuer is liable for misleading, unfair, or unclear information for 12 months
Significant EMTs
The EBA may classify an EMT as “significant” based on criteria including:
- Size of the customer base (more than 10 million holders)
- Value of issued tokens (more than EUR 5 billion)
- Number and value of transactions (more than 2.5 million transactions or EUR 500 million daily)
- Significance of cross-border activities
- Interconnectedness with the financial system
Additional requirements for significant EMTs:
- Enhanced capital requirements (own funds of at least 3% of the average reserve)
- Liquidity management policy with minimum 30% of reserves in bank deposits
- Recovery plan
- Redemption plan
- Direct EBA supervision (rather than NCA supervision)
ART Authorization and Compliance
Authorization Process
ART issuers must obtain authorization from the NCA of the member state where they are established:
Application Requirements:
- Programme of operations describing the ART and business model
- Legal opinion on whether the ART qualifies as an ART under MiCA
- Description of governance arrangements
- Internal control mechanisms
- Risk management procedures
- Business continuity plan
- Description of the reserve and custody arrangements
- Investment policy for the reserve
- Whitepaper draft
NCA Assessment:
- Completeness check within 25 working days
- Assessment within 60 working days of acknowledging a complete application
- The NCA consults with the EBA, ESMA, and the ECB (or relevant central bank) during assessment
Timeline: 4-8 months from application to authorization, depending on the NCA and the complexity of the ART.
ART-Specific Requirements
Reserve of Assets:
- The issuer must maintain a reserve of assets corresponding to the claims of ART holders
- Reserve composition must match what is described in the whitepaper
- Reserve assets must be invested in secure, low-risk assets
- A custodian must be appointed to hold the reserve assets
- No rehypothecation, lending, or pledging of reserve assets
- Reserve management policy must be publicly available
Own Funds:
- ART issuers must maintain own funds equal to the higher of:
- EUR 350,000
- 2% of the average amount of reserve assets
- For significant ARTs: 3% of the average reserve
Governance:
- Board of directors with at least one independent member
- Documented governance arrangements
- Effective risk management framework
- Internal audit function
- Conflicts of interest management
Complaints Handling:
- Published complaint handling procedure
- Free-of-charge complaint handling
- Response within a reasonable timeframe
- Complaints register maintained
Significant ARTs
ARTs may be classified as significant by the EBA based on the same criteria as significant EMTs. Additional requirements include:
- Enhanced own funds (3% of average reserve)
- Remuneration policy for management
- Interoperability requirements
- Liquidity management policy
- Recovery and redemption plans
- Direct EBA supervision
Restrictions on Widely Used ARTs
If an ART is “widely used as a means of exchange” within a single currency area (e.g., more than 1 million daily transactions or EUR 200 million daily transaction value), the issuer must:
- Cease issuing the ART
- Present a plan to reduce usage to below the thresholds
- This restriction is designed to protect monetary sovereignty
Cross-Border Considerations
Passporting for EMTs and ARTs
EMT issuers (credit institutions and EMIs) can provide services across the EU using existing banking/EMI passporting frameworks. ART issuers authorized in one member state can offer ARTs across the EU after notification to the NCA.
Non-EU Issuers
Non-EU stablecoin issuers (including Tether, unless it obtains EU authorization) face significant barriers:
- EMTs and ARTs offered to EU residents must comply with MiCA
- CASPs cannot list non-compliant stablecoins for EU customers
- Major exchanges have delisted non-compliant stablecoins from their EU platforms
- Non-EU issuers must either obtain authorization in an EU member state or partner with an EU-authorized entity
Impact on US Dollar Stablecoins
USD-denominated stablecoins face particular challenges under MiCA:
- A USD stablecoin offered in the EU is classified as an EMT referencing USD
- The issuer must be an authorized credit institution or EMI established in the EU
- The “widely used” restrictions could limit USD stablecoin usage in the eurozone – for a comparative analysis, see MiCA vs. US compliance requirements
- Circle has obtained an EMI license in France to issue USDC as a MiCA-compliant EMT
Compliance Costs
| Component | EMT (via EMI license) | ART Authorization |
|---|---|---|
| Legal counsel | EUR 150,000-400,000 | EUR 200,000-500,000 |
| EMI/ART application fees | EUR 5,000-25,000 | EUR 5,000-25,000 |
| Capital/own funds | EUR 350,000+ | EUR 350,000+ |
| Whitepaper preparation | EUR 25,000-75,000 | EUR 25,000-75,000 |
| Reserve custody setup | EUR 50,000-150,000 | EUR 50,000-150,000 |
| Compliance infrastructure | EUR 100,000-300,000 | EUR 150,000-400,000 |
| Total Initial | EUR 680,000-1,300,000 | EUR 780,000-1,525,000 |
| Annual Ongoing | EUR 400,000-1,200,000 | EUR 500,000-1,500,000 |
Implementation Timeline
Months 1-2: Classify the stablecoin (EMT vs. ART) and select the home member state. For broader context on EU regulation, see our European Union jurisdiction profile Months 2-4: Prepare the application package including whitepaper, governance documentation, and compliance framework Months 4-6: Submit application to NCA; establish reserve custody arrangements Months 6-10: NCA review, respond to questions and requests for additional information Months 10-12: Receive authorization; finalize technology and operational readiness Month 12+: Launch compliant stablecoin operations in the EU