Executive summary
The present analysis undertakes to establish the permissibility of stablecoin-multi-issuance arrangements from a MiCA perspective, but also to indicate the limits of such permissibility. The reasoning path deployed herein differs from the arguments presented in literature, which undertake to establish the permissibility of stablecoin multi-issuance arrangements by bringing these within MiCA’s regulatory perimeter as a whole, i.e. as a structure. On the contrary, the present analysis claims that the non-EU aspects of a multi-issuance arrangement form part of an EU-based issuer’s activities on an international scale, being allowed, because they are simply not prohibited, as they fall out of MiCA’s scope.
More specifically, MiCA is not prescriptive on the business activities an EU-based issuer may deploy, as is e.g. the UCITSD and the AIFMD with regard to fund managers, hence not limiting the activities of an EU-based stablecoin issuer to those regulated under MiCA. This also emanates from the MiCA references to the activities of the EU-based (ART or EMT) issuer ‘on an international scale’ and to the other ‘creditors of the issuer’ in Article 36 paragraph2 of MiCA. However, the permissibility of multi-issuance arrangements applies only at the level of the EU-based (ART or EMT) issuer and only in the context of its other non-MiCA activities. In essence, the EU-based issuer is allowed to deploy activities in parallel to the MiCA ones, but not to commingle such activities, e.g. by way of offering a non-EU issued stablecoin in the EU or using the reserve to satisfy redemption requests from the non-EU token holders under the multi-issuance arrangement. Such holders can be satisfied out of the issuer’s estate, but not out of the reserve, which has to legally and operationally segregated from the issuer’s estate, since it secures the claim of the holders of the EU-issued token only, to the exclusion of replenishment considerations as well. For this reason, the reserve, within the meaning of MiCA, must secure and serve only the claims of the holders of the EU-issued token under a multi-issuance arrangement, with token fungibility not being an excuse. Within the context of the analysis on the reserve being the limit of the permissibility of multi-issuance arrangements, it will also be shown that EU-based holders of an EU-issued stablecoin are prioritized over holders of the same EU-issued stablecoin based outside the EU, this being the actual meaning of Recital nr.54 of MiCA.
It will also be shown in the present analysis that, unlike the references in literature and institutional guidance, a multi-issuance arrangement is not a ‘joint’ issuance of the ‘same’ token, but a parallel issuance; namely an issuance of distinct tokens by distinct entities, even if affiliated, under different legal frameworks for each token so issued. Finally, it will be also shown that, although multi-issuance arrangements are generally permitted, there is one case of a priori prohibited multi-issuance arrangement. The reason therefore being that Article 48 paragraph2 of MiCA provides that ‘An e-money token that references an official currency of a Member State shall be deemed to be offered to the public in the Union.’. Thus, a multi-issuance arrangement where the non-EU token issued in the context of such arrangement references a Union currency is brought within MiCA’s regulatory perimeter and is not allowed, unless issued in compliance with MiCA, i.e. from an EMI or a credit institution.