MiCA review: ABBL calls for pragmatic improvements to support digital finance

MiCA has provided Europe with a harmonised framework for crypto-assets at a time when stablecoins, tokenisation and digital-asset services are increasingly intersecting with traditional finance.

For the ABBL, the review should therefore focus on refining the existing framework rather than fundamentally redesigning it.

The Association supports a pragmatic, innovation-friendly and risk-based approach built around three priorities: enabling innovation in regulated digital finance, ensuring greater legal and regulatory certainty, and maintaining a proportionate supervisory framework.

Supporting stablecoins and tokenised bank money

The ABBL sees a meaningful role for appropriately regulated stablecoins, particularly in areas such as cross-border payments, crypto-asset market liquidity, corporate treasury and selected tokenised-market use cases.

Its response supports keeping MiCA open to multi-issuance models, provided that material risks are addressed through robust requirements on reserves, redemption, transparency, supervisory reporting and cooperation with third-country authorities.

The ABBL favours such targeted safeguards over blanket restrictions that could fragment markets or push activity outside the EU regulatory perimeter.

At the same time, deposit tokens that qualify as bank deposits and MiCA-compliant e-money tokens should be able to develop alongside each other.

Tokenised deposits in particular have significant potential for the settlement of tokenised financial instruments, institutional liquidity management and collateral-related use cases, while keeping commercial bank money within the existing banking and prudential framework.

For the ABBL, however, the development of new digital forms of money should preserve the two-tier monetary system.

For systemically important wholesale settlement, central bank money should remain the anchor wherever available, given its role as the safest settlement asset. Regulated commercial bank money, including tokenised deposits, can complement that anchor, while MiCA-compliant e-money tokens can provide additional settlement options subject to appropriate safeguards.

This approach combines innovation with monetary stability and avoids the development of competing or disconnected settlement ecosystems.

The ABBL has advocated the same cascading approach in its work on tokenised market infrastructures.

This direction is also consistent with the Eurosystem’s strategy for tokenised wholesale markets, which seeks to maintain central bank money as the anchor of the two-tier monetary system while enabling DLT-based financial-market innovation.

Preserving the boundary between MiCA and capital-markets legislation

A second priority concerns the interaction between MiCA and the existing EU capital-markets framework.

The ABBL considers that financial instruments should remain governed by MiFID/MiFIR, MAR, the Prospectus Regulation and other applicable sectoral legislation, irrespective of the technology used to issue or transfer them.

Applying distributed-ledger technology should not, in itself, change the regulatory nature of an instrument.

Practical uncertainty nevertheless remains in a number of borderline cases, including tokenised fund interests, digital representations of existing securities, hybrid tokens and other structures combining features of MiCA crypto-assets and traditional financial instruments.

The ABBL therefore supports further clarification at EU level and closer supervisory coordination.

Legal certainty before tokenisation can scale

Beyond regulatory classification, the ABBL stresses the importance of strengthening the legal foundations of tokenised markets.

Greater certainty is still needed around ownership, custody, asset segregation, collateral, insolvency, settlement finality and conflict-of-law questions.

These issues are becoming increasingly important as tokenisation moves from experimentation towards institutional use.

Technical innovation alone will not be sufficient. Market participants need certainty about how rights over digital assets can be exercised and enforced, including in cross-border and insolvency situations.

For the ABBL, strengthening these legal foundations is a necessary condition for tokenisation to develop safely and at scale.

Cooperation rather than supervisory centralisation

The ABBL also supports stronger oversight and coordination for complex groups combining crypto-asset activities with other financial services.

It does not, however, support a general transfer of direct supervision of crypto-asset service providers to ESMA.

National competent authorities should retain direct supervisory responsibility, supported by stronger cooperation between NCAs and European authorities, common methodologies and effective information sharing.

More broadly, the ABBL considers that MiCA should evolve coherently with the DLT Pilot Regime, the Market Integration and Supervision Package, CSDR, payment legislation, prudential rules and European initiatives on wholesale central bank money.