Romania -- Stablecoin Regulations Regulatory Overview

Romania, as a member state of the European Union, will primarily be governed by the Markets in Crypto-Assets Regulation (MiCA) for stablecoins. While MiCA is directly applicable across all EU member states, specific national authorities (like the National Bank of Romania - BNR, and the Financial Supervisory Authority - ASF) will be responsible for its implementation, supervision, and authorization processes within Romania.

Before MiCA fully applies to stablecoins (from June 30, 2024), the regulatory landscape in Romania for stablecoins has been largely indirect, relying on existing financial services and anti-money laundering (AML) legislation, with no specific stablecoin framework.

Here's a breakdown based on MiCA and the current Romanian context:

Regulatory Framework for Stablecoins in Romania (Post-MiCA)

MiCA introduces a specific regulatory regime for crypto-assets that aim to maintain a stable value, dividing them into two main categories:

1. E-money Tokens (EMTs): Crypto-assets that purport to maintain a stable value by referencing the value of a single fiat currency.
2. Asset-Referenced Tokens (ARTs): Crypto-assets that purport to maintain a stable value by referencing any other value or right, or a combination thereof, including one or several official currencies that are not legal tender, one or several commodities, or one or several crypto-assets.

MiCA's Key Provisions (applicable in Romania):

1. Classification (e-money/payment tokens/securities)

• EMTs: Explicitly classified as a form of e-money under MiCA. Issuers must be authorized as a credit institution or an electronic money institution (EMI) under the E-money Directive (2009/110/EC), as transposed into Romanian law.
• ARTs: Are a new classification under MiCA. They are not considered traditional e-money or securities, but are regulated specifically as crypto-assets under MiCA. However, if an ART meets the definition of a financial instrument under MiFID II (transposed into Romanian Law no. 24/2017), it would fall under that regime instead of MiCA.
• Payment Tokens (MiCA uses this term for EMTs): MiCA defines EMTs as a specific type of crypto-asset intended to be used as a medium of exchange.

2. Reserve Requirements

• EMTs:
  • Issuers must at all times maintain a reserve of assets equal to the nominal value of the EMTs in circulation.
  • The reserve assets must be held in credit institutions, be fully segregated from the issuer's own assets, and be invested in highly liquid, low-risk instruments.
  • Funds received in exchange for EMTs must be protected in accordance with the E-money Directive, meaning they must be placed in a separate account in a credit institution or invested in secure, low-risk assets.
• ARTs:
  • Issuers must at all times maintain a reserve of assets covering the value of the ARTs in circulation.
  • The reserve assets must be segregated from the issuer's own assets.
  • The reserve must be managed prudently, ensuring sufficient liquidity and diversification.
  • A significant portion of the reserve assets must be held in highly liquid financial instruments, and in separate accounts with credit institutions.
  • A liquidity management policy is required to ensure the issuer can meet redemption requests.

3. Issuer Licensing

• General Requirement: Issuers of ARTs and EMTs must be authorized by a national competent authority in an EU member state. In Romania, this role will likely be shared between:
  • National Bank of Romania (BNR): Primarily for EMTs (as it supervises EMIs and credit institutions) and ARTs if they significantly impact financial stability.
  • Financial Supervisory Authority (ASF): Likely for ARTs that might resemble investment products or have characteristics closer to capital markets.
• Specific for EMTs: Issuers must be authorized as a credit institution or an electronic money institution (EMI) under the E-money Directive 2009/110/EC, or seek specific authorization under MiCA.
• Authorization Process: Involves submitting a comprehensive application covering business plans, governance arrangements, operational resilience, reserve management policies, risk management, and more.

4. Redemption Rights

• EMTs: Holders of EMTs have a right to redeem their tokens at any time, at par value, against the fiat currency referenced by the token, from the issuer or the e-money institution/credit institution where the funds are held.
• ARTs: Holders of ARTs have a right to redeem their tokens directly with the issuer, at any time, for the assets or value referenced by the token, or for fiat currency, under the terms specified in the white paper.

5. Algorithmic Stablecoin Rules

• MiCA does not explicitly "ban" algorithmic stablecoins, but its strict requirements for reserve assets for both ARTs and EMTs effectively make it very difficult for purely algorithmic stablecoins (i.e., those without sufficient backing by actual, stable assets) to operate legally within the EU at scale.
• Any crypto-asset claiming to maintain a stable value must demonstrate how it does so through a robust and managed reserve of assets, not solely through algorithmic mechanisms or arbitrage opportunities. If an algorithmic stablecoin cannot meet the ART or EMT reserve requirements, it cannot be issued.

6. CBDC Interaction

• MiCA primarily regulates private crypto-assets. It does not directly regulate or interact with Central Bank Digital Currencies (CBDCs).
• Should the European Central Bank (ECB) decide to issue a Digital Euro (a CBDC), it would operate under a distinct legal framework, separate from MiCA, as it would be issued by a central bank and considered central bank money.
• A Digital Euro could potentially reduce the demand for private stablecoins by offering a fully risk-free digital alternative.

Pre-MiCA Situation in Romania (Prior to June 30, 2024)

Prior to MiCA's full applicability, there is no specific legislation governing stablecoins in Romania. The approach has been:

• E-money Classification: Some stablecoins (especially those pegged 1:1 to RON or EUR) could potentially be viewed as electronic money if they meet the criteria of Law no. 210/2004 (which transposes the E-money Directive 2009/110/EC). If so, their issuers would be subject to authorization and supervision by the National Bank of Romania (BNR) as e-money institutions.
• Securities Classification: If a stablecoin provided rights akin to a financial instrument (e.g., dividends, voting rights, participation in profit), it could potentially be classified as a security under Romanian capital markets law (Law no. 24/2017).
• AML/CFT: All entities dealing with stablecoins (exchanges, custodians, etc.) are considered Virtual Asset Service Providers (VASPs) under Romanian AML/CFT law (Law no. 129/2019, transposing AMLD5/6). They are required to register with the National Office for Prevention and Control of Money Laundering (ONPCSB) and comply with KYC, transaction monitoring, and reporting obligations.
• Unregulated: Many stablecoins, particularly those not clearly falling into the above categories, have operated in a largely unregulated space, apart from the general AML/CFT obligations.

Specific Legislation and Regulatory References with URLs

1. Markets in Crypto-Assets Regulation (MiCA):

   • Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets, and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937.
   • URL: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R1114
   • Applicability: Rules for ARTs and EMTs (Title III and IV of MiCA) apply from 30 June 2024.

2. Law no. 210/2004 regarding the legal regime of electronic payment instruments (Legea nr. 210/2004 privind regimul juridic al instrumentelor de plată electronică):

   • This law transposes the E-money Directive into Romanian legislation and governs e-money institutions.
   • URL (Lege5.ro - a comprehensive legal database): https://lege5.ro/Gratuit/guzdqmrqgawq/legea-nr-210-2004-privind-regimul-juridic-al-instrumentelor-de-plata-electronica
   • Note: This law is relevant for the classification and regulation of entities issuing E-money Tokens (EMTs) under MiCA.

3. Law no. 129/2019 for the prevention and combating of money laundering and terrorist financing (Legea nr. 129/2019 pentru prevenirea și combaterea spălării banilor și finanțării terorismului):

   • This law transposes AMLD5/6 into Romanian legislation, including provisions for Virtual Asset Service Providers (VASPs).
   • URL (Lege5.ro): https://lege5.ro/Gratuit/ge3dmnrvgi3a/legea-nr-129-2019-pentru-prevenirea-si-combaterea-spalarii-banilor-si-finantarii-terorismului
   • Relevant for: KYC/AML obligations for any entity dealing with stablecoins.

4. National Bank of Romania (Banca Națională a României - BNR):

   • The primary regulator for e-money institutions and credit institutions. Will be a key competent authority for EMTs and potentially ARTs impacting financial stability under MiCA.
   • URL: https://www.bnr.ro/

5. Financial Supervisory Authority (Autoritatea de Supraveghere Financiară - ASF):

   • The primary regulator for capital markets, insurance, and private pensions. Likely to be a key competent authority for ARTs under MiCA, especially those that have characteristics akin to investment products.
   • URL: https://asfromania.ro/

In conclusion, the regulatory landscape for stablecoins in Romania is rapidly evolving from a largely unspecific or indirectly regulated environment to a comprehensive, harmonized framework under the EU's MiCA Regulation, with the National Bank of Romania and the Financial Supervisory Authority as the designated national competent authorities.