This post first appeared as Blog post at FIN LAW.
Which will have legal effect in the European Union from June 30, 2024 Markets in Crypto Assets Regulation (MiCA) stipulates that a white paper must be prepared when offering e-money tokens to the public or when e-money tokens are admitted to trading on a trading platform. In the first two parts of the series, we looked at the content requirements for a white paper in the event of an offer or approval of crypto assets other than asset-referenced tokens or e-money tokens, as well as asset-referenced tokens. In this part we will look at the requirements for an e-money token white paper. MiCA defines an e-money token as a crypto asset whose value stability is to be maintained with reference to the value of an official currency. In principle, issuers of e-money tokens may only be legal entities that are approved as a credit institution or as an e-money institution.
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Content requirements for a MiCA white paper for e-money tokens
The content requirements for a white paper for e-money tokens have many similarities with the content requirements for the white paper for cryptoassets and asset-referenced tokens, supplemented by some special features for e-money tokens. The white paper for e-money tokens must also contain information about the issuer. In particular, the white paper must indicate what legal form and company ID the issuer has and what its address is. In addition, issuers must provide information on their financial performance over the past three years in a white paper for e-money tokens, provided the issuer has existed for that long. As already mentioned above, only regulated companies that have a license as a credit institution or as an e-money institution may issue e-money tokens.
Accordingly, an e-money token white paper must contain precise details of the approval as an issuer of the e-money token and the name of the competent authority that granted the approval. If the issuer also issues other crypto assets or carries out activities related to crypto assets, this must be clearly stated. Information about the e-money token must then be included, such as the characteristics of the token and details of all natural or legal persons involved in the design and development of the token.
Specific information about the public offering of the e-money tokens or the admission to trading must also be included. This information includes, for example, the total number of tokens. In another section of the white paper, the rights and obligations associated with the e-money token must be presented, as well as information about the technology on which the token is based. The issuer-related and the e-money token-related risks must also be presented and explained in a separate section.
The requirements set for e-money tokens by MiCA must be addressed
The section on the rights and obligations associated with e-money tokens must contain information on how the issuer ensures compliance with the requirements set by MiCA for the issuance of e-money tokens. MiCA provides that holders of e-money tokens have a claim against the issuer of the relevant e-money tokens. At the request of the holder of an e-money token, the issuer must repay the monetary value of the e-money token to the holder at any time and at face value.
Accordingly, a precise description of the right to redeem at face value and the procedure and conditions for exercising these rights must be included. As with asset-referenced tokens, a recovery plan and a redemption plan must also be put in place for e-money tokens. The redeem plan shall demonstrate that the e-money token issuer is able to redeem the outstanding issued e-money token without causing undue economic harm to its holders. Accordingly, the white paper must contain a description of the rights related to the implementation of the recovery plan and the trade-back plan.
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