Stablecoins and E-Money Tokens Under MiCA

Stablecoins and E-Money Tokens Under MiCA

Stablecoins were the first part of the crypto market to come under the EU's Markets in Crypto-Assets Regulation, with the rules for issuers applying from 30 June 2024 — six months before the rest of MiCA. The reason is simple: tokens that promise a stable value against the euro or dollar look and behave like money, and a failure of a widely used stablecoin could transmit stress into the wider financial system. For accountants and finance professionals, stablecoins are also where MiCA most directly intersects with financial reporting, reserve assurance and treasury practice. This article explains the two regulated categories, the obligations on issuers, and the practical implications for advisers in the UK and Ireland.

EMTs and ARTs: The Two Regulated Stablecoin Categories

MiCA does not use the word 'stablecoin'. Instead it defines two categories:

• E-money tokens (EMTs) — crypto-assets that purport to maintain a stable value by referencing the value of one official currency. A euro stablecoin or a dollar stablecoin is an EMT. EMTs are treated as electronic money: holders have a legal claim against the issuer and a right to redeem at par, at any time, in funds.
• Asset-referenced tokens (ARTs) — crypto-assets that purport to maintain a stable value by referencing any other value or right, or a combination, such as a basket of currencies, commodities like gold, or other crypto-assets.

The classification matters because the regimes differ. Only authorised credit institutions and electronic money institutions may issue EMTs in the EU. ART issuers can be other legal persons established in the EU, but they require specific authorisation from their national competent authority and approval of their white paper. Algorithmic tokens that claim stability without backing assets cannot escape the framework by design — and tokens that fall within these definitions cannot lawfully be offered to the EU public without a compliant issuer.

Reserve, Redemption and Prudential Requirements

The substance of the stablecoin regime is in the asset backing and the redemption promise:

• Reserve of assets — ART issuers must maintain a reserve of assets that is legally and operationally segregated from their own estate, insulated from issuer insolvency, and invested only in highly liquid, low-risk instruments. EMT issuers must safeguard the funds received: a significant proportion must be held as deposits with credit institutions, with the remainder in secure, low-risk, highly liquid assets denominated in the referenced currency.
• Redemption at par — EMT holders have a permanent right of redemption at par value, free of charge. ART holders likewise have redemption rights against the issuer at the market value of the referenced assets or by delivery of those assets. The days of stablecoins with discretionary, gated or fee-laden redemption are over in the EU.
• No interest — MiCA prohibits issuers and CASPs from granting interest on EMTs and ARTs, deliberately preventing stablecoins from competing with bank deposits as remunerated savings products.
• Own funds — ART issuers face minimum own funds requirements set as the highest of a fixed floor of €350,000, a percentage of the reserve assets, and a quarter of fixed overheads, with supervisors able to require more.
• Governance and disclosure — approved white papers, clear disclosure of the stabilisation mechanism and redemption rights, complaints procedures, and recovery and redemption plans that can be activated if the issuer fails.

Significant Tokens: EBA Supervision and Tougher Rules

EMTs and ARTs that reach systemic scale are classified as 'significant' by reference to criteria including the number of holders, market capitalisation, transaction volumes and interconnectedness with the financial system. Significant tokens are supervised by the European Banking Authority rather than national authorities alone, and face enhanced requirements — higher own funds (up to 3% of average reserve assets), stricter liquidity management, and interoperability obligations. There are also constraints on the use of non-euro-denominated tokens as a widespread means of exchange within the euro area, reflecting monetary sovereignty concerns. The practical effect has been visible since 2024: several global stablecoins restructured their EU arrangements or were delisted by EU venues pending compliance, while MiCA-authorised euro and dollar EMTs have expanded.

Accounting and Assurance Implications

Stablecoins generate distinctive work for accountants on both sides of the balance sheet:

• Holder accounting — because a compliant EMT carries a contractual right to redeem at par in funds, holders will often conclude it meets the definition of a financial asset under IAS 32, rather than the IAS 38 intangible treatment applied to bitcoin-style assets. The analysis depends on the specific terms, but the classification difference materially changes measurement.
• Issuer accounting — issuers recognise a financial liability to token holders and account for the reserve assets, with the matching, liquidity and interest-rate dynamics of the reserve becoming a core treasury management problem.
• Reserve assurance — MiCA requires independent verification of reserves for ART issuers, and the market increasingly expects audited reserve reporting beyond the bare regulatory minimum. The gap between an 'attestation' at a point in time and a true audit is exactly the kind of distinction accountants should be explaining to boards and users.
• Treasury use — corporates using stablecoins for settlement or cross-border payments need policies covering counterparty exposure to the issuer, classification, and reconciliation of on-chain movements to the ledger.

For auditors of issuers, the reserve is where the engagement risk concentrates. Key questions include: are the reserve assets actually segregated and insolvency-remote as a matter of law, not just policy; does the maturity and liquidity profile of the reserve genuinely support the redemption promise under stress; how are the reserve assets valued, and is the token float reconciled daily to the backing; and are related-party exposures within the reserve identified and disclosed? The history of stablecoin controversies is largely a history of reserves that were not what holders believed them to be — commercial paper of uncertain quality, loans to affiliates, or assets pledged elsewhere. MiCA's rules are designed to close those gaps, but rules only bite when someone checks, and that someone is increasingly an accountant.

The UK Angle: A Parallel Regime Emerging

The UK is building its own framework for stablecoins used in payments, with the Treasury, FCA and Bank of England consulting on rules for sterling-denominated stablecoin issuance and custody. The direction of travel rhymes with MiCA — authorised issuers, backing asset requirements and redemption rights — but the detail differs, and UK practitioners advising clients active in both markets will need to track both regimes. For now, MiCA is the operating benchmark, and UK firms issuing or distributing stablecoins into the EU must comply with it through an EU-authorised entity. Practitioners with clients on both sides of the Irish Sea should map each product against both regimes early, because the structuring decisions — where to incorporate the issuer, where to hold the reserve, which entity contracts with customers — are expensive to unwind once tokens are in circulation. The same is true of the United States, where federal stablecoin legislation has created a third major framework that global issuers must reconcile with MiCA's requirements.

Study with Learnsignal

Stablecoins sit at the junction of payments regulation, treasury management and financial reporting — exactly where accountants are being asked for answers as MiCA enforcement tightens through 2026. Learnsignal's flexible online CPD courses help qualified accountants build practical knowledge of digital assets regulation around their working week. Add stablecoin fluency to your advisory toolkit before your clients ask for it.