Stablecoins in Scope — EMTs, ARTs & Issuer Framework

Introduction

Under the Markets in Crypto-Assets Regulation (MiCA), not all stablecoins are treated equally. The regulation establishes a clear taxonomy that differentiates between E-Money Tokens (EMTs), Asset-Referenced Tokens (ARTs), and other crypto-assets. This classification determines the applicable requirements for issuers, ranging from governance and reserve management to redemption rights and regulatory reporting.

The differentiation matters because it recognises that a single-currency stablecoin poses different risks to the financial system than one referencing a diversified basket of assets. It also addresses the practical and legal differences between a token functioning as a pure payment instrument and one designed as an investment or store of value with broader asset backing.

Understanding how EMTs and ARTs are defined and regulated under MiCA is essential for issuers, investors, and intermediaries seeking to operate in the European Union’s crypto market.

Defining E-Money Tokens (EMTs)

An E-Money Token, under MiCA, is a type of crypto-asset that purports to maintain a stable value by referencing the value of a single official currency of an EU member state or a recognised foreign currency. Functionally, EMTs are digital representations of fiat currency on a blockchain and are intended primarily for payment purposes.

In practice, EMTs resemble traditional e-money under the E-Money Directive (EMD2), but their issuance and transfer take place on distributed ledger technology rather than in the traditional banking infrastructure. This distinction allows EMTs to integrate into decentralised finance (DeFi) protocols, cross-border payments, and blockchain-based settlement systems, while still being subject to regulatory oversight equivalent to that applied to non-blockchain e-money.

The core obligation for EMT issuers is to guarantee that holders can redeem their tokens at any time, at par value, in the referenced currency. This requirement aligns with the consumer protection principles of traditional e-money law, ensuring that users have a direct and enforceable claim against the issuer.

Defining Asset-Referenced Tokens (ARTs)

Asset-Referenced Tokens differ in that they maintain their value by referencing multiple assets rather than a single currency. These assets may include a combination of currencies, commodities, crypto-assets, or other financial instruments. ARTs are designed to offer stability without being tied exclusively to one fiat currency, making them more akin to multi-asset investment products.

From a regulatory perspective, ARTs present more complex oversight challenges. The composition of their backing assets can introduce market, credit, and operational risks that vary with asset type and volatility. For example, an ART referencing both the euro and gold may be exposed to commodity price fluctuations that would not affect a euro-denominated EMT.

MiCA addresses these risks by imposing additional authorisation requirements, enhanced governance standards, and specific disclosure obligations on ART issuers. Notably, ART issuers must publish detailed information on the basket of assets used for value reference, including the methodology for maintaining stability and the process for rebalancing the underlying reserves.

What Falls Outside EMT and ART Classifications

MiCA’s classification system leaves room for other types of crypto-assets that do not qualify as EMTs or ARTs. These include utility tokens, which grant access to a product or service, and crypto-assets that are unbacked or rely solely on algorithmic mechanisms to maintain value. While such assets are still regulated under MiCA when offered to the public or admitted to trading, they do not face the same reserve, redemption, or asset-management requirements as EMTs and ARTs.

Algorithmic stablecoins, in particular, are excluded from EMT and ART definitions because they do not rely on traditional reserve assets for value stability. MiCA does not ban algorithmic stablecoins outright, but it prohibits marketing them as stablecoins if they lack sufficient backing to ensure value maintenance. This restriction is intended to prevent consumer misunderstanding and mitigate systemic risks similar to those witnessed during the TerraUSD collapse.

Licensing Requirements for EMT and ART Issuers

Issuers of EMTs and ARTs must be authorised entities within the EU. For EMTs, this means holding a licence as an Electronic Money Institution (EMI) or a credit institution under existing EU banking rules. ART issuers must obtain a specific MiCA authorisation from their national competent authority (NCA), even if they already operate in other financial sectors.

The licensing process includes a review of the issuer’s governance structure, capital adequacy, risk management policies, and operational resilience. Applicants must demonstrate the technical capacity to manage token issuance, redemption, and reserve safeguarding in compliance with MiCA’s provisions. This includes the deployment of secure custody arrangements for backing assets and robust systems for tracking token circulation.

Governance and Operational Standards

MiCA places significant emphasis on governance as a means of ensuring issuer accountability. EMT and ART issuers must establish a board with clear responsibilities for overseeing risk management, compliance, and operational processes. Senior managers are subject to fitness and propriety assessments to ensure they have the necessary competence and integrity to manage the institution.

Operationally, issuers are required to maintain systems that can handle peak redemption demands without disruption. This includes maintaining sufficient liquidity in reserve assets and having contingency funding arrangements in place. For ARTs, the operational framework must also accommodate ongoing monitoring of asset basket composition and valuation.

Reserve and Safeguarding Requirements

One of the central pillars of MiCA’s framework for EMTs and ARTs is the requirement for fully backed reserves. For EMTs, the reserve must consist of assets denominated in the referenced currency and held with a regulated custodian. ART reserves may include a broader range of assets but must be highly liquid, low-risk, and appropriately diversified.

Issuers must segregate reserve assets from their own funds to protect token holders in the event of insolvency. They must also implement daily reconciliation processes to ensure the reserve’s value matches or exceeds the total value of outstanding tokens. Independent audits and public attestations of reserve holdings are required at regular intervals to promote transparency and market confidence.

Redemption Rights and Consumer Protection

A defining feature of EMTs and ARTs under MiCA is the statutory right of holders to redeem tokens at par value (for EMTs) or at the current market value of the underlying basket (for ARTs). Redemption must be executed without undue delay, and issuers are prohibited from imposing fees or conditions that could hinder access to funds.

To further protect consumers, MiCA requires issuers to disclose all relevant risks in plain language within their white papers. These disclosures must cover potential scenarios such as depegging, asset illiquidity, or legal disputes affecting reserve holdings. This transparency is designed to enable users to make informed decisions and to align with broader EU consumer protection standards.

Significant EMTs and ARTs

MiCA introduces the concept of “significant” EMTs and ARTs—tokens whose size, reach, or interconnectedness with the financial system warrants enhanced oversight. Significance is determined by criteria including market capitalisation, number of users, transaction volumes, and cross-border activity.

Issuers of significant tokens face stricter obligations, such as higher capital buffers, more frequent reporting to the European Banking Authority (EBA), and participation in supervisory stress tests. They may also be subject to direct EBA supervision rather than oversight solely by their national authority.

Reporting and Disclosure Obligations

Transparency is central to MiCA’s regulatory philosophy. Issuers must submit periodic reports to their supervising authority detailing reserve composition, redemption activity, governance changes, and any incidents that could impact stability. Significant tokens must also publish monthly summaries of key metrics for public review.

White papers are a critical element of disclosure. These documents must outline the token’s purpose, design, governance, risk factors, reserve arrangements, and redemption process. Any material changes require updated publications, ensuring that stakeholders always have access to current information.

Interaction with AML/CFT Requirements

While MiCA focuses on prudential and conduct regulation, it operates in conjunction with the EU’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) framework. Issuers must implement robust know-your-customer (KYC) procedures and monitor transactions for suspicious activity. Transfers of EMTs and ARTs above defined thresholds must comply with the EU’s “travel rule,” which mandates the sharing of originator and beneficiary information between service providers.

Case Examples

In early 2025, Circle became the first non-bank to receive an EU EMI licence for issuing EMTs, enabling its USDC and euro-denominated EUROC to operate fully within MiCA’s scope. The firm implemented daily reserve attestations, multi-jurisdictional custody arrangements, and real-time redemption systems to meet the regulation’s operational standards.

On the ART side, Société Générale’s EURCV launched in late 2023 as a euro-pegged token referencing a diversified pool of assets, including sovereign bonds and cash. Its issuance under MiCA’s ART provisions involved pre-approval of its white paper by the French regulator and quarterly reserve audits published to investors.