Spain -- Stablecoin Regulations Regulatory Overview

The regulatory framework for stablecoins in Spain is primarily governed by the Markets in Crypto-Assets (MiCA) Regulation (EU) 2023/1114, which is a landmark EU-wide regulation that directly applies in all Member States, including Spain. While some national AML/CFT regulations are already in place for crypto-asset service providers, MiCA is the definitive framework for stablecoin issuers and will significantly reshape the landscape when its relevant provisions become fully applicable.

The stablecoin-related provisions of MiCA apply from June 30, 2024.

Here's a breakdown of the regulatory framework for stablecoins in Spain under MiCA, along with existing national regulations:

Key Legislation and Regulatory Authorities

1. Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCA):

   • This is the primary legal text. It creates a harmonized legal framework for crypto-assets not already covered by existing financial services legislation.
   • URL: Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets

2. National Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) Legislation:

   • Ley 10/2010, de 28 de abril, de prevención del blanqueo de capitales y de la financiación del terrorismo (Law 10/2010, of April 28, on the prevention of money laundering and terrorist financing).
   • Real Decreto-ley 7/2021, de 27 de abril, de transposición de directivas de la Unión Europea en diversas materias (Royal Decree-Law 7/2021, of April 27, transposing EU directives on various matters), which incorporated the 5th AMLD, including crypto-asset service providers, into Spanish law.
   • URLs:
     • Ley 10/2010 (Spanish)
     • Real Decreto-ley 7/2021 (Spanish)

3. Regulatory Authorities in Spain:

   • Banco de España (BdE): The central bank of Spain, responsible for supervising e-money institutions and credit institutions. Under MiCA, it will also be the competent authority for the supervision of issuers of e-money tokens (EMTs) and potentially asset-referenced tokens (ARTs), especially those of significant scale. It also maintains the registry for crypto-asset service providers under national AML law.
     • URL (BdE Crypto Register): Banco de España - Register of providers of virtual currency exchange for fiat currency and electronic custody of electronic wallets
   • Comisión Nacional del Mercado de Valores (CNMV): Spain's securities market regulator. It will be the competent authority for the supervision of issuers of ARTs (other than those supervised by BdE for e-money activities) and other crypto-assets under MiCA.
     • URL: CNMV official website

Stablecoin Classification under MiCA

MiCA categorizes stablecoins into two main types, distinguishing them from traditional e-money and securities:

1. E-money Tokens (EMTs):

   • Defined as a crypto-asset whose main purpose is to be used as a means of exchange and that purports to maintain a stable value by referencing the value of one single fiat currency.
   • These are essentially tokenized fiat currency.
   • Classification: EMTs fall under MiCA's specific regime but are also closely linked to the E-money Directive (EMD2). An issuer of an EMT is considered an e-money institution and must comply with both MiCA and relevant EMD2 provisions.

2. Asset-Referenced Tokens (ARTs):

   • Defined as a crypto-asset that is not an e-money token and that purports to maintain a stable value by referencing any other value or right, or a combination thereof, including one or several fiat currencies, one or several commodities, or one or several crypto-assets, or a combination of such assets.
   • Classification: ARTs are a distinct category under MiCA. They are not e-money or securities in the traditional sense, but MiCA creates a bespoke regulatory regime for them.

Not classified as securities: MiCA explicitly states that crypto-assets covered by the regulation (including ARTs and EMTs) are not financial instruments (securities) as defined in MiFID II, unless they inherently qualify as such. This distinction prevents stablecoins from being automatically subjected to the stricter securities regulations.

Reserve Requirements

MiCA imposes strict reserve requirements for both ARTs and EMTs:

1. For E-money Tokens (EMTs):

   • Issuers must at all times maintain a 1:1 peg with the fiat currency they reference.
   • The issuer must ensure that the reserve assets are invested in secure, low-risk assets (e.g., short-term government bonds, highly liquid money market funds) and held in segregated accounts with credit institutions.
   • At least 30% of the reserve assets must be held in demand deposits and be available for immediate redemption.
   • Issuers are required to publish daily reserve statements.

2. For Asset-Referenced Tokens (ARTs):

   • Issuers must maintain a reserve of assets that is equal to or greater than the value of the ARTs in circulation.
   • The reserve assets must be liquid and held in custody by an independent third party (credit institution or crypto-asset service provider authorized for custody).
   • The investment policy for reserve assets must be publicly available, clear, and designed to minimize market, credit, and liquidity risk.
   • A minimum of 30% of the reserve assets must be held in highly liquid financial instruments with minimal market risk, capable of being liquidated within one business day.
   • Issuers must establish clear redemption policies.

Issuer Licensing

MiCA mandates specific authorization for stablecoin issuers:

1. For E-money Tokens (EMTs):

   • Only credit institutions (banks) or e-money institutions (EMIs) authorized under the EMD2 can issue EMTs.
   • An existing EMI license will be sufficient, but the EMI will also need to comply with the additional requirements of MiCA specific to EMTs.
   • The Banco de España would be the competent authority in Spain for supervising these entities.

2. For Asset-Referenced Tokens (ARTs):

   • Issuers of ARTs must be a legal entity established in the EU and obtain specific authorization from their national competent authority (in Spain, likely the CNMV, or the BdE if the ART has characteristics close to e-money or falls under its remit due to scale).
   • The authorization process involves a detailed application, demonstrating robust governance arrangements, internal control mechanisms, risk management procedures, and compliance with all MiCA requirements.
   • "Significant ARTs" (those with a large user base or high value) will be subject to enhanced supervision by the European Banking Authority (EBA) and potentially the European Central Bank (ECB).

Redemption Rights

MiCA enshrines strong redemption rights for stablecoin holders:

1. For E-money Tokens (EMTs):

   • Holders of EMTs have a right to redeem their tokens at par value (1:1) against the referenced fiat currency at any time.
   • This redemption must be done without undue delay and without charging any fees, unless otherwise specified in the white paper for specific circumstances (e.g., very high volumes).

2. For Asset-Referenced Tokens (ARTs):

   • Issuers must provide clear and precise terms and conditions for redemption, including the value at which the ARTs can be redeemed (which must be at fair market value of the referenced assets).
   • Redemption must be possible at any time, directly from the issuer or via a payment services provider.

Algorithmic Stablecoin Rules

MiCA takes a strong stance against algorithmic stablecoins that do not maintain their stability through asset reserves.

• Prohibition: MiCA effectively prohibits stablecoins that rely solely on an algorithm to maintain their price stability without backing their value with sufficient, robust reserve assets.
• Asset-Backed Requirement: The core principle of MiCA's stablecoin framework is that both ARTs and EMTs must be backed by actual reserves designed to ensure their stability and allow for redemption. This means purely algorithmic, unbacked stablecoins like the former TerraUSD (UST) model would not be permitted under MiCA.

CBDC Interaction

Spain, as part of the Eurozone, is actively involved in the Eurosystem's work on a digital euro (Central Bank Digital Currency - CBDC).

• Banco de España's Role: The Banco de España is participating in the technical and policy discussions led by the European Central Bank (ECB) regarding the design and implementation of a digital euro.
• Distinction from Stablecoins: A digital euro would be distinct from MiCA-regulated stablecoins.
  • Digital Euro: Central bank money, risk-free, direct liability of the ECB. It would serve as an official complement to cash and bank deposits.
  • Stablecoins (ARTs/EMTs): Private sector money, issued by regulated private entities, and subject to the specific risks and regulatory requirements outlined in MiCA.
• Complementary but Separate: While both aim to facilitate digital payments, they operate on different levels. Stablecoins could potentially interact with a digital euro as a bridge or a method for specific use cases, but the digital euro's existence would create a fundamental, risk-free digital monetary base that stablecoins would exist alongside. The digital euro aims to preserve monetary sovereignty and offer a public option for digital payments, which could impact the demand for private stablecoins.

In conclusion, Spain's regulatory framework for stablecoins is undergoing a significant transformation with the advent of MiCA. This EU regulation establishes a comprehensive regime for stablecoin classification, issuance, reserve management, and consumer protection, bringing clarity and robust oversight to this rapidly evolving segment of the crypto market. The Banco de España and CNMV will be the key national authorities responsible for implementing and enforcing these rules.