European Banking Authority has new rules for stablecoin issuer recovery plans

Under MiCA, the EBA’s extensive proposal outlines how stablecoin and cryptocurrency issuers should think about risk and plan for recovery options in the event of catastrophe

article-image

nitpicker/Shutterstock modified by Blockworks

share

The European Banking Authority released draft guidelines for stablecoin issuers Wednesday, per a mandate under the recently passed Markets in Crypto-Assets Regulation (MiCA) policy. 

In its proposal, the EBA outlines how issuers of stablecoins — which the regulator refers to as asset-reference tokens (ARTs) — and other cryptocurrencies should structure their risk management and recovery plans. 

“All issuers should include a de-pegging risk indicator, aimed to keep track of the alignment between the market price of the token and the market value of the referenced asset,” the draft reads. 

The regulator stipulated that in response to “adverse scenarios” potentially affecting a company’s adherence to regulatory standards, there must be prepared measures in place to ensure token holders are fully compensated.

“Issuers should include at least one recovery option that would strengthen the capital position and one recovery option aimed at improving the liquidity position of the issuer,” the EBA suggests. 

Similar to draft laws making their way through the US legislature, the EBA’s proposal includes mandates on stablecoin reserves. Reserve assets should be liquid, ample and low-volatility, the EBA suggests, adding that an issuer’s recovery plan is dependent upon the nature of its reserves. 

The “liquidity profile” of reserve assets should also be monitored regularly, per the EBA’s draft. 

The draft comes months after the European Union voted to advance MiCA by a 13:1 margin. While the sweeping regulatory package has been hailed by many as the most comprehensive of its kind, it still leaves a significant portion of the crypto industry — decentralized finance — out. 

“[Excluding DeFi] was a conscious political decision by EU policymakers when negotiating MiCA given the small size of the nascent market and a desire to see the market evolve and become more understood before deciding on how it should be regulated,” Mark Foster, the EU policy lead at the Crypto Council for Innovation told Blockworks in October. 

“If there are risks that have been identified, they can propose legislation at a later stage for the EU to then potentially develop something on DeFi in the course of the next Parliament,” Foster added. 

The comment period for the draft consultation ends on Feb. 8. Interested parties are also invited to attend a public hearing on Jan. 30, the EBA announced.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Fluid's hybrid money market & DEX protocol has grown rapidly since launch in December of 2024.

article-image

Should higher-fidelity graphics be the goal for crypto games — which result in much higher costs and risk?

article-image

From Mel B to Neil deGrasse Tyson, BTC has seen its share of strange celebrity sightings

article-image

Circle’s roadshow will be the real test for the stablecoin issuer

article-image

PitchBook’s Robert Le said crypto projects focused on institutional use cases are the focus

article-image

The decentralized AI firm designed ODS to be owned by the community in an effort to promote more decentralized AI

article-image

The non-profit’s launch and big-name hires aim to grow Solana’s footprint in Washington