Article 58 Specific additional obligations for issuers of e-money tokens

Summary What does Article 58 of the MiCA regulation say?

This article deals specifically with electronic money institutions (EMIs) that issue significant e-money tokens, establishing that they must follow the stricter reserve, custody, investment, and liquidity requirements set out in this Regulation rather than the corresponding provisions of the existing E-Money Directive (Directive 2009/110/EC).

It effectively acts as an override of the standard EMI framework for those institutions whose e-money tokens have crossed the significance threshold under Articles 56 or 57.

The article also gives competent authorities discretion to extend some of these elevated requirements to EMIs issuing non-significant e-money tokens where risks warrant it, and extends certain oversight rules to e-money tokens denominated in non-EU currencies.

Important points:

If you are an electronic money institution issuing significant e-money tokens, comply with the reserve management, custody, and liquidity requirements of this Regulation instead of the equivalent provisions of the E-Money Directive.
Arrange for an independent audit every six months once your e-money tokens are classified as significant, rather than following the standard audit cycle.
Competent authorities of home Member States may require non-significant e-money token issuers to meet the same elevated requirements where liquidity, operational, or reserve management risks justify it.

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

1. Electronic money institutions issuing significant e-money tokens shall be subject to:
  1. the requirements referred to in Articles 36, 37, 38 and Article 45, (1) to (4) of this Regulation, instead of Article 7 of Directive 2009/110/EC;
  2. the requirements referred to in Article 35(2), (3) and (5) and Article 45(5) of this Regulation, instead of Article 5 of Directive 2009/110/EC.
2. By way of derogation from Article 36(9), the independent audit shall, in respect of issuers of significant e-money tokens, be mandated every six months as of the date of the decision to classify the e-money tokens as significant pursuant to Article 56 or 57, as applicable.
1. Competent authorities of the home Member States may require electronic money institutions issuing e-money tokens that are not significant to comply with any requirement referred to in paragraph 1 where necessary to address the risks that those provisions aim to address, such as liquidity risks, operational risks, or risks arising from non-compliance with requirements for management of reserve of assets.
1. Articles 22, 23 and 24(3) shall apply to e-money tokens denominated in a currency that is not an official currency of a 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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