March 15, 2024

European Banking Authority Unveils Standards for Stablecoin Complaint Handling

The EBA's latest move focuses on establishing a clear framework for addressing holder complaints, marking a significant stride in the regulation of stablecoins within the EU.

In adherence to the newly enacted Markets in Crypto-Assets Regulation (MiCA), the European Union is pushing forward with the formulation of regulatory frameworks governing stablecoins.

This week, the European Banking Authority (EBA) unveiled the final draft of regulatory technical standards in collaboration with the European Securities and Markets Authority (ESMA), charged with overseeing EU markets. These standards delineate the procedures that stablecoin issuers must adhere to in handling complaints.

Under the outlined standards, issuers of asset-referenced tokens, colloquially termed stablecoins, are required to publicly disclose their complaint handling processes and establish a standardized mechanism for customers and users to lodge complaints.

The draft standards specify that upon receiving a complaint, issuers must promptly acknowledge its receipt, clearly indicating the date, and furnish the complainant with a copy, particularly if the complaint is submitted electronically. Furthermore, they are mandated to assess the complaint's admissibility and completeness, seeking additional information from token holders and other relevant parties as necessary for investigation.

Initially released for public feedback in July 2023, the draft standards underwent refinement based on received comments, with the EBA incorporating targeted amendments to address concerns. Notable revisions encompass provisions pertaining to data protection and the inclusion of a section in complaint forms for complainants to specify legal representatives.

This final draft follows the EBA's previous release of draft guidelines regarding recovery plans for stablecoin and other cryptocurrency issuers, which emphasized the importance of including recovery options aimed at bolstering both capital and liquidity positions.

Scheduled for submission to the European Commission for endorsement by June 2024, the finalized regulatory technical standards will subsequently undergo scrutiny by the European Parliament and the Council for approval, marking a crucial milestone in the evolution of stablecoin regulations within the EU.

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