By releasing proposed regulatory requirements for stablecoin issuers to follow when handling complaints, the financial regulators of the European Union (EU) aim to expand the regulations governing stablecoins under the Markets in Crypto-Assets (MiCA) regulatory framework.

On March 13, the Regulatory Technical Standards (RTS) released guidelines for quickly and fairly handling complaints from holders of asset reference tokens (ARTs). The methods and requirements outlined in these rules help stablecoin issuers handle complaints in an efficient manner.

The European Banking Authority (EBA) document said:

“Such a framework should support innovation and fair competition while ensuring a high level of protection of retail holders and the integrity of markets in crypto assets.”

The European Securities and Markets Authority (ESMA), the EU's market regulator, and the EBA worked together to create this stablecoin regulatory framework, according to the EBA report. The consultations were carried out by both organisations in July and October of 2023.

This regulatory framework is due for submission to the European Commission for approval by the end of June. Subsequently, these standards will undergo review by the European Parliament and the European Council before being published in the Official Journal of the European Union, the bloc’s authoritative repository of existing laws.

Within the bloc, stablecoins that are able to be connected to several fiat currencies or other assets, such as cryptocurrencies, are classified as ARTs under the MiCA regulatory framework. This is not the same as stablecoins that are only based on the value of one currency, such as the dollar or the euro.

Through the MiCA law, the EU had been actively monitoring stablecoins prior to this. The collapse of Terra's UST, which sparked worries about their potential systemic ramifications, made the case for stablecoin oversight even more urgent. The EBA had independently proposed rules for stablecoin holders in the past.

A further element of the MiCA legislation requires that board members and shareholders of crypto asset service providers (CASPs) undergo stringent vetting. The goal of these regulations is to permit CASPs while maintaining the division of client assets and trade. Preventing the mixing of corporate and consumer funds, as happened with FTX, is the aim.

While the stablecoin legislation is scheduled to debut in the summer, the full implementation of MiCA is expected to occur by December. A complete framework for cryptocurrency issuers, service providers, and users is what the MiCA Act aims to build.