The European Banking Authority (EBA) and the European Securities Markets Authority (ESMA) have jointly rolled out a consultation paper, outlining draft guidelines on the suitability assessment of members of the management body of issuers of asset-referenced tokens (ARTs), commonly known as stablecoins, and crypto-asset service providers (CASPs).

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The guidelines set forth by the EBA and ESMA underscore the imperative for members of the management body of stablecoin issuers and CASPs to uphold a sterling reputation.

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They should be armed with the requisite knowledge, skills, and experience, and must allocate adequate time to their professional commitments.

Additionally, shareholders and members holding significant stakes are mandated to maintain an impeccable reputation, particularly in areas linked to money laundering or terrorist financing.

The consultation paper bifurcates into two primary draft guidelines: The first zeroes in on the suitability assessment of the management body of stablecoin issuers and CASPs. The latter focuses on evaluating shareholders and members with qualifying holdings.

The guidelines aim to instill trust in the financial ecosystem and bolster confidence in crypto assets, especially stablecoins, and their associated services.

Authorities are urged to establish robust mechanisms for evaluating the management body members and to step in if they are found lacking in their ability to conduct business with integrity.

Over the next three months, the EBA and ESMA are seeking feedback on these draft guidelines.

The finalized guidelines are slated to be in place once MiCA is officially enacted.

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