After spending years drafting the Markets in Crypto-Assets regulation, Europe declared to the world that it had accomplished what America was unable to: it had created a comprehensive, cohesive set of rules for digital assets, broken down by category, along with a corresponding licensing system. One of those categories was created for tokens that were backed by more than one currency, most notably gold.
This month marks the two-year anniversary of that category. There are no tokens authorized under it. Not a few. Zero. Tether Gold and PAX Gold, the goods for which the category was created, are among the top 50 cryptocurrency assets with a combined worth of around $4.4 billion. They are stored and traded by Europeans through organizations that are completely outside the system designed to regulate them. The intriguing question is whether the hole in the world’s most comprehensive cryptocurrency law is a failure or if the design is functioning perfectly as planned. The hole is shaped like a gold bar.
The category for which no one applied
Stablecoin-shaped assets are divided into two buckets by MiCA, and downstream decisions are made based on this division.
EMTs, or e-money tokens, are based on a single recognized currency. This bucket acts as a euro stablecoin or a compliant dollar stablecoin. Among the top 50 stablecoins, only Circle’s USDC and EURC, as well as Paxos’s USDG, are compliant. All other tokens that retain value by referencing any asset or basket that is not a single fiat currency are known as asset-referenced tokens, or ARTs.
EMTs, or e-money tokens, are based on a single recognized currency. This bucket acts as a euro stablecoin or a compliant dollar stablecoin. Among the top 50 stablecoins, only Circle’s USDC and EURC, as well as Paxos’s USDG, are compliant. All other tokens that retain value by referencing any asset or basket that is not a single fiat currency are known as asset-referenced tokens, or ARTs.
ARTs are multi-currency baskets. ARTs are algorithmic designs linked to non-fiat collateral. Furthermore, since gold is a referenced asset rather than a currency, commodity-backed tokens are, crucially for this narrative, ARTs. Wherever they are examined under MiCA, PAXG and XAUT fall within this category.
The ART regulations went into force on June 30, 2024, and the final transitional window will close on July 1. The broader service-provider regime will follow in December. Because a reference basket is more complicated to administer than a single currency, an ART issuer must obtain authorization from a national competent authority, publish a standardized white paper under ESMA’s disclosure guidelines, and maintain reserves and governance structures heavier than the EMT counterpart. The European Banking Authority may identify a coin as a major ART under Article 43 if it exceeds thresholds for client count, transaction volume, and market value. This would result in additional capital, liquidity, and interoperability requirements—the most punitive tier of the legislation.
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