Issuers of asset-referenced tokens (‘ARTs’)

Under the Markets in Crypto-assets Regulation (MiCA), issuers of Asset-Referenced Tokens (ARTs) are subject to a harmonised regulatory framework that imposes clear obligations and operational safeguards. This framework is designed to mitigate systemic risks, promote investor confidence, and ensure the sound issuance and management of ARTs across the EU.

Regulatory Framework for ART Issuers

Overview of MiCA Regulation for ART Issuers

MiCA provides a dedicated authorisation regime for ART issuers, requiring them to obtain regulatory approval prior to issuance. The regulation sets out core obligations relating to governance, disclosures, reserve asset management, and prudential oversight. These rules ensure that ARTs are issued by entities with adequate financial, operational, and compliance capacity to fulfil obligations to token holders and preserve financial stability.

Governance, Transparency, and Risk Management Obligations

Issuers must implement robust governance structures, including well-defined roles and responsibilities at management level, internal control mechanisms, and independent compliance and risk functions. Transparency is enforced through pre-contractual disclosures outlining the rights attached to the token, the composition of the reference assets, and redemption mechanisms. Issuers must also identify, assess, and mitigate operational, market, legal, and liquidity risks through formal risk management frameworks.

Reserve Asset Requirements and Capital Adequacy

ART issuers are required to maintain reserve assets that fully match the value of outstanding tokens at all times. These reserves must be composed of low-risk, highly liquid assets held in custody with credit institutions or central banks, and kept segregated from the issuer’s own funds. In addition, issuers must comply with ongoing capital requirements to ensure operational continuity, including minimum own-funds thresholds that vary based on the scale of operations and associated risks.

Benefits of Issuing Asset-Referenced Tokens

• Enhanced Market Credibility and Consumer Trust
  Compliance with MiCA lends legitimacy and trust to ART projects, as issuers are subject to regulatory scrutiny, independent audits, and transparency obligations. This increases user confidence in the token’s stability and backing.
• Access to Broader Investor Base within the EU Market
  MiCA’s passporting regime enables authorised ART issuers to operate across all EU Member States without requiring additional licences. This unlocks access to a pan-European market and simplifies cross-border expansion strategies.
• Regulatory Clarity and Legal Certainty under MiCA
  ART issuers benefit from clear, uniform rules that reduce ambiguity around their legal obligations. This certainty enables better strategic planning, lowers legal risks, and makes it easier to attract partners and institutional stakeholders.
• Competitive Advantages and Strategic Opportunities
  Being an early and compliant ART issuer can create a first-mover advantage, offering visibility and brand strength in a nascent regulated market. Additionally, alignment with EU standards may attract collaborations with traditional financial institutions and facilitate integration with regulated DeFi or fintech ecosystems.

Application Process for ART Issuers under MiCA

Prospective ART issuers must undergo a structured application process with competent EU authorities to obtain authorisation. This process ensures that only entities meeting stringent regulatory standards are permitted to issue ARTs, thereby preserving market integrity and consumer protection.

Eligibility Criteria for ART Issuers

To be eligible, applicants must be legal persons established within the EU with sufficient financial and operational capacity to meet MiCA obligations. Key decision-makers must demonstrate adequate knowledge, skills, and integrity. Entities must also show readiness to maintain reserve assets, manage risks effectively, and implement strong governance and compliance systems.

Documentation and Preparation for the Application

Applicants are required to compile a comprehensive submission including core business information, operational plans, and technical documentation. Preparatory work should focus on aligning internal systems with MiCA’s regulatory requirements to avoid delays or rejections.

Detailed Business Plan and Token Economics

A detailed business plan must be submitted, outlining the token’s structure, issuance strategy, target user base, and use cases. The token economics must describe the reference assets, stabilisation mechanisms, redemption procedures, and how reserve adequacy will be maintained.

Governance and Compliance Structures

Applicants must provide a full overview of their governance framework, including board composition, risk and compliance functions, internal audit procedures, and reporting lines. Evidence of internal controls to monitor AML/CFT risks, operational risks, and conflicts of interest is also required.

Proof of Adequate Reserves and Risk Mitigation Measures

Applicants must submit verifiable documentation demonstrating that sufficient reserve assets will be held and properly safeguarded. Risk mitigation measures must be clearly defined, including liquidity management, custody arrangements, and contingency plans.

Timeline and Key Stages of the Application Process

The process typically includes:

• Pre-application engagement with regulators to clarify requirements and expectations.
• Formal submission of the application dossier.
• Regulatory review, including requests for further information and clarifications.
• Decision and authorisation, granted if all criteria are met within the statutory assessment period.

Preparation and coordination with legal and compliance advisors are essential to navigate this process efficiently and reduce time to market.

Annual Fees and Ongoing Obligations

How Can CSBGroup Support Your ART Licence Application

CSB Group offers end-to-end support for your Asset-Referenced Token (ART) licence under MiCA. From assessing eligibility and preparing your application to liaising with regulators and ensuring ongoing compliance, our team ensures a smooth and efficient process. We also provide substance solutions, governance support, and strategic advice to help you launch and operate within the EU with full confidence.