In a bid to bolster the oversight of stablecoins within the European Union (EU), financial regulators have unveiled proposed regulatory requirements for stablecoin issuers to streamline complaint resolution processes under the Markets in Crypto-Assets (MiCA) regulatory framework.

On March 13, the release of Regulatory Technical Standards (RTS) introduced guidelines aimed at expediting and ensuring fairness in addressing complaints from holders of asset reference tokens (ARTs). These guidelines delineate methods and prerequisites to aid stablecoin issuers in efficiently managing complaints.

According to a statement from the European Banking Authority (EBA):

"A framework of this nature should foster innovation and equitable competition while upholding a high standard of protection for retail holders and the integrity of crypto asset markets."

The European Securities and Markets Authority (ESMA) and the EBA collaborated in crafting this regulatory framework for stablecoins, with consultations conducted in July and October of 2023.

The proposed regulatory framework is slated for submission to the European Commission for endorsement by the end of June. Subsequent to approval, these standards will undergo scrutiny by the European Parliament and the European Council before publication in the Official Journal of the European Union, the authoritative repository of EU laws.

Under the MiCA regulatory framework, stablecoins linked to multiple fiat currencies or assets, including cryptocurrencies, are classified as ARTs within the EU. This distinct classification excludes stablecoins solely pegged to the value of a single currency, such as the dollar or euro.

The EU has been actively monitoring stablecoins under the MiCA law, spurred by concerns following the collapse of Terra's UST, which underscored potential systemic risks. The EBA had previously proposed regulations for stablecoin holders independently.

Another facet of the MiCA legislation mandates rigorous vetting for board members and shareholders of crypto asset service providers (CASPs). These regulations aim to facilitate the operation of CASPs while preserving the segregation of client assets and trading. The overarching objective is to prevent commingling of corporate and consumer funds, as evidenced by incidents like that involving FTX.

While the stablecoin legislation is set to debut in the summer, full implementation of MiCA is anticipated by December. The MiCA Act endeavors to establish a comprehensive framework for cryptocurrency issuers, service providers, and users alike.