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To protect holders of asset-referenced tokens against a decrease in value of the assets backing the value of the tokens, issuers of asset-referenced tokens should invest the reserve assets in secure, low risks assets with minimal market and credit risk. As the asset-referenced tokens can be used as a means of payment, all profits or losses resulting from the investment of the reserve assets should be borne by the issuer of the asset-referenced tokens. Issuers of asset-referenced tokens are usually at the centre of a network of entities that ensure the issuance of such, their transfer and their distribution to holders. Asset-referenced tokens aim at stabilising their value by reference to several fiat currencies, to one or more commodities, to one or more other crypto-assets, or to a basket of such assets. They could therefore be widely adopted by users to transfer value or as a means of payments and thus pose increased risks in terms of consumer protection and market integrity compared to other crypto-assets.

Chapter 1 also sets out detailed provisions on the powers of national competent authorities , cooperation between competent authorities , with the EBA and ESMA or with other authorities . It also details the notification duties of Member States , rules on professional secrecy , data protection and on precautionary measures that can be taken by national competent authorities of host Member States . Article 90 sets out rules on cooperation with third countries and Article 91 specifies complaint handling by competent authorities. ‘Stablecoins’ whose value is backed by one single currency that is legal tender are close to the definition of e-money under the Electronic Money Directive. The aim of many ‘stablecoins’ is to create a “means of payments” and, when backed by a reserve of assets, some ‘stablecoins’ could become a credible means of exchange and store of value. service providers that are authorised to provide advice on crypto-assets shall warn clients that, due to their tradability, the value of crypto-assets may fluctuate. Crypto-asset service providers that are authorised to provide advice on crypto-assets shall assess the compatibility of such crypto-assets with the needs of the clients and recommend them only when this is in the interest of the clients. Those rules and procedures shall ensure that the crypto-asset service provider cannot lose clients’ crypto-assets or the rights related to those assets due to frauds, cyber threats or negligence.

  • In April 2011, Namecoin was created as an attempt at forming a decentralized DNS, which would make internet censorship very difficult.
  • The issuer or the holders of asset-referenced tokens, unless they prove that such loss has arisen from an external event beyond reasonable control.
  • Those can be more difficult to use and demand more technical know-how, but they may also offer some security benefits because there is no single target for a cyberattack.
  • The general rule of thumb regarding Bitcoin mining remains relatively straightforward.

The new legislation is meant to facilitate Washington state’s increased adoption of Web3 innovation. IG International Limited is part of the IG Group and its ultimate parent company is IG Group Holdings Plc. IG International Limited receives services from other members of the IG Group including IG Markets Limited. The information on this site is not directed at residents of the United States and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Blocks are linked together by cryptography – complex mathematics and computer science.

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Tittle III, Chapter 6, Article 42 obliges the issuer to have a procedure in place for an orderly wind-down of their activities. The financial and budgetary impacts of this proposal are explained in detail in the legislative financial statement annexed to this proposal. This proposal is accompanied by an impact assessment, which was submitted to the Regulatory Scrutiny Board on 29 April 2020 and approved on 29 May 2020. Under the principle of proportionality, the content and form of EU action should not exceed what is necessary to achieve the objectives of the Treaties. The proposed rules will not go beyond what is necessary in order to achieve the objectives of the proposal. They will cover only the aspects that Member States cannot achieve on their own and where the administrative burden and costs are commensurate with the specific and general objectives to be achieved.


The right of appeal before a tribunal shall also apply where, in respect of an application for authorisation as a crypto-asset service provider which provides all the information required, no decision is taken within six months of its submission. ESMA, in close cooperation with the EBA, shall develop draft regulatory technical standards containing a template document for cooperation arrangements that are to be used by competent authorities of Member States where possible. In order to ensure uniform conditions of application of this Article, ESMA, in close cooperation with the EBA, shall develop draft implementing technical standards to establish standard forms, templates and procedures for the cooperation and exchange of information between competent authorities and with the EBA and ESMA. Crypto-asset providers that are authorised for exchanging crypto-assets against fiat currency or other crypto-assets shall establish a non-discriminatory commercial policy that indicates, in particular, the type of clients they accept to transact with and the conditions that shall be met by clients. Crypto-asset service providers may start to provide crypto-asset services in a Member State other than their home Member State from the date of the receipt of the communication referred to in paragraph 3 or at the latest 15 calendar days after having submitted the information referred to in paragraph 1. Competent authorities shall notify applicant crypto-asset service providers of their decisions to grant or to refuse authorisation within three working days of the date of that decision.

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The coordination of supervisory examination programmes based on the risk assessment carried out by the issuer of significant asset-referenced tokens in accordance with Article 30. The EBA shall exercise the powers of competent authorities conferred by Articles 21, 37 and 38 as regards issuers of significant asset-referenced tokens. ESMA, after consultation of the EBA, shall develop draft implementing technical standards to establish standard forms, templates and procedures for the cooperation and exchange of information between competent authorities. Set procedures to ensure efficient settlement of both transactions and fiat currency transactions. Crypto-asset service providers shall disclose to their clients and potential clients the general nature and sources of conflicts of interest and the steps taken to mitigate them. Clients shall be able to file complaints with crypto-asset service providers free of charge.

Article 77 defines the notion of inside information and indicates that an issuer whose crypto-assets are admitted to trading on a trading platform for crypto-assets shall disclose inside information. Other provisions of the title ban insider dealing , unlawful disclosure of inside information and market manipulation . Title III, Chapter 2 sets out the obligations for issuers of asset-referenced tokens.