Article 57 Voluntary classification of e-money tokens as significant e-money tokens

Summary What does Article 57 of the MiCA regulation say?

This article establishes a voluntary opt-in mechanism that runs parallel to the mandatory classification process set out in Article 56.

Where Article 56 covers the automatic classification of e-money tokens as significant based on observed data, Article 57 allows an issuer of an e-money token — provided it is authorised or applying for authorisation as a credit institution or electronic money institution — to proactively request that its token be classified as significant from the outset.

The article then lays out the procedural steps for EBA to assess that request, consult relevant authorities, and reach a final decision, as well as the consequences for supervisory responsibility if classification is granted.

A notable derogation preserves national supervisory authority where a significant e-money token denominated in a non-euro Member State currency is predominantly used within that Member State.

Important points:

Issuers of e-money tokens may voluntarily request significant classification by demonstrating, through a programme of operations, that they are likely to meet at least three of the criteria set out in Article 43(1).
EBA is required to reach a final classification decision within 60 working days of the initial notification, after which supervisory responsibility transfers from the national competent authority to EBA within 20 working days.
The transfer of supervisory responsibility to EBA does not apply where at least 80% of holders and transaction volume of a significant e-money token denominated in a non-euro currency are concentrated in the home Member State.

Springlex's summary of the article, a reading aid, not a substitute for the legal text.

1. An issuer of an e-money token, authorised as a credit institution or as an electronic money institution, or applying for such authorisation, may indicate that it wishes for its e-money token to be classified as a significant e-money token. In that case, the competent authority shall immediately notify such request of the issuer to EBA, to the ECB and, in the cases referred to in Article 56(3), second subparagraph, to the central bank of the Member State concerned.
2. In order for the e-money token to be classified as significant under this Article, the issuer of the e-money token shall demonstrate, through a detailed programme of operations, that it is likely to meet at least three of the criteria set out in Article 43(1).
1. EBA shall, within 20 working days from the date of notification referred to in paragraph 1 of this Article, prepare a draft decision containing its opinion based on the issuer’s programme of operations whether the e-money token fulfils or is likely to fulfil at least three of the criteria set out in Article 43(1) and notify that draft decision to the competent authority of the issuer’s home Member State, to the ECB and, in the cases referred to in Article 56(3), second subparagraph, to the central bank of the Member State concerned.
2. The competent authorities of issuers of such e-money tokens, the ECB and, where applicable, the central bank of the Member State concerned shall have 20 working days from the date of notification of that draft decision to provide observations and comments in writing. EBA shall duly consider those observations and comments before adopting a final decision.
1. EBA shall take its final decision on whether to classify an e-money token as a significant e-money token within 60 working days of the date of notification referred to in paragraph 1 and immediately notify that decision to the issuer of such e-money token and its competent authority.
1. Where an e-money token has been classified as significant pursuant to a decision of EBA taken in accordance with paragraph 3 of this Article, the supervisory responsibilities with respect to issuers of those e-money tokens shall be transferred from the competent authority to EBA in accordance with Article 117(4) within 20 working days from the date of notification of that decision.
2. EBA and the competent authorities shall cooperate in order to ensure the smooth transition of supervisory competences.
1. By way of derogation from paragraph 4, the supervisory responsibilities with respect to issuers of significant e-money tokens denominated in an official currency of a Member State other than the euro shall not be transferred to EBA, where at least 80 % of the number of holders and of the volume of transactions of those significant e-money tokens are or are expected to be concentrated in the home Member State.
2. The competent authority of the issuer’s home Member State shall provide EBA annually with information on the application of the derogation referred to in the first subparagraph.
3. For the purposes of the first subparagraph, a transaction shall be considered to take place in the home Member State when the payer or the payee are established in that Member State.

Relevant recitals

Recital 59 Criteria and obligations for significant tokens

Asset-referenced tokens and e-money tokens should be deemed significant when they meet, or are likely to meet, certain criteria, including a large customer base, a high market capitalisation, or a large number of transactions. As such, they could be used by a large number of holders and their use could raise specific challenges in terms of financial stability, monetary policy transmission or monetary sovereignty. Those significant asset-referenced tokens and e-money tokens should, therefore, be subject to more stringent requirements than asset-referenced tokens or e-money tokens that are not deemed significant. In particular, issuers of significant asset-referenced tokens should be subject to higher capital requirements, to interoperability requirements and they should establish a liquidity management policy. The appropriateness of the thresholds to classify an asset-referenced token or e-money token as significant should be reviewed by the Commission as part of its review of the application of this Regulation. That review should, where appropriate, be accompanied by a legislative proposal.

Recital 71 Additional requirements for significant EMT issuers

Significant e-money tokens could pose greater risks to financial stability than e-money tokens that are not significant and traditional electronic money. Issuers of significant e-money tokens that are electronic money institutions should therefore be subject to additional requirements. Such issuers of significant e-money tokens should in particular be subject to higher capital requirements than issuers of other e-money tokens, be subject to interoperability requirements and establish a liquidity management policy. They should also comply with some of the same requirements that apply to issuers of asset-referenced tokens with regard to reserve of assets, such as those on custody and investment of the reserve of assets. Those requirements for issuers of significant e-money tokens should apply instead of Articles 5 and 7 of Directive 2009/110/EC. As those provisions of Directive 2009/110/EC do not apply to credit institutions when issuing e-money, neither should the additional requirements for significant e-money tokens under this Regulation.

Table of contents

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