Commission Delegated Regulation (EU) 2025/415 of 13 December 2024 supplementing Regulation (EU) 2023/1114 of the European Parliament and of the Council with regard to regulatory technical standards specifying adjustment of own funds requirement and minimum features of stress testing programmes of issuers of asset-referenced tokens or of e-money tokens

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to 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 (1), and in particular Article 35(6), third subparagraph, thereof,

Whereas:

(1) Requirements set out in Article 35(3) and (5) of Regulation (EU) 2023/1114 also apply to electronic money institutions issuing significant e-money tokens in accordance with Article 58(1), point (b), of that Regulation and, where required by the competent authority under Article 58(2) of that Regulation, to electronic money institutions issuing e-money tokens that are not significant.

(2) When assessing the circumstances requiring higher own funds for issuers of asset-referenced tokens or e-money tokens, the competent authorities should consider the impact a failure of the tokens could have on financial stability, including large-scale redemptions, trigger of sales at extremely discounted prices due to financial distress of reserve assets or deposit withdrawals, potentially causing significant market disruptions, possible negative consequences for funding, and systemic risks across the financial system.

(3) Given the novelty of asset-referenced tokens and e-money tokens and their issuers, no universal risks assessment framework exists. Therefore, when deciding whether an increase in own funds requirement is justified, competent authorities should perform the evaluation on any relevant issuers on a case-by-case basis following a broad assessment of all the relevant risk criteria set out in Article 35(3) of Regulation (EU) 2023/1114. Requiring a possible increase of own funds requirements should depend on issuer-specific circumstances. Issuers of asset-referenced tokens or e-money tokens that are subject to such own funds requirements should always be adequately capitalised for the risks they face. All relevant historical and current information available should be used for the said broad assessment and evaluation. Generally, increases in own funds requirements should only be requested when there is a higher degree of risk, which is not already covered, and the measures of the relevant issuer are insufficiently effective to reduce the risks.

(4) Where a competent authority requires an increase in own funds requirements of the issuer of tokens, the timeframe provided to comply with such increase should be as short as possible since the relevant issuer, applying a proper and effective risk management, should always be adequately capitalised for the risks they face.

(5) Where a competent authority concludes that the risks, including volatility, of a particular asset-referenced token or e-money token might lead to a significant deterioration of the financial situation of the relevant issuer or impact its financial stability, the competent authority should set a shorter timeframe for the relevant issuer to increase the own funds.

(6) To ensure that issuers of asset-referenced tokens or e-money tokens make sound risk management decisions, such issuers and their relevant competent authorities should understand the financial and operational risks that come with increased use of asset-referenced or e-money tokens. In addition, they should consider interlinkages with ecosystem of issuers of tokens more broadly and inherent interconnectedness with the traditional financial sector stemming from reserves of assets held. Therefore, it is necessary to further specify the stress testing of the solvency and liquidity risk of issuers.

(7) The impact of the so called ‘run-risk’, meaning a sudden spike in redemption requests of the tokens, resulting in a fire sale of the reserve assets backing the tokens, should be analysed via liquidity stress-testing. It is, therefore, essential to specify minimum features of the liquidity stress-testing such as those related to governance, data infrastructure, risk categorisation and frequency.

(8) To ensure that the results of the stress test remain relevant, solvency stress test should be carried out on a quarterly basis for issuers of significant asset-referenced tokens or e-money tokens, and on a semi-annual basis for issuers of non-significant asset-referenced tokens or e-money tokens. The liquidity stress test should be carried out monthly.

(9) The stress testing should consider severe but plausible financial stress scenarios and non-financial stress scenarios, such as liquidity shocks, credit shocks, interest rate and exchange shocks, redemption risk and operational and third-party shocks. It should also ensure that the internal governance arrangements and the relevant data infrastructures are in place to allow issuers of asset-referenced tokens or e-money tokens and competent authorities to understand the characteristics, quantify risks and gather evidence that such issuers are effectively allocating and mitigating risk on an ongoing basis.

(10) As a guiding principle, the stress testing programmes should follow similar rules and approach as to credit institutions stress testing under Directive 2013/36/EU of the European Parliament and of the Council (2). However, considering that the risks of crypto-asset activities provided by issuers of asset-referenced tokens or e-money tokens other than credit institutions are different to those of credit institutions, it is necessary to group the crypto-asset activities into different risk categories for the purpose of the stress testing. Furthermore, grouping the crypto-asset activities and risks should ensure that issuers of the relevant tokens and competent authorities are able to identify all the functions, processes, and actors, along with their associated risks including any environmental, social, and governance factors, and identify any potential issues or risks. These identifications should facilitate the design and assignment of specific risk scenarios presented in the different activities of the relevant issuer. The scenarios should be well-defined in order to quantify their potential impact, the range of potential losses and the range of plausibility associated with the specific risk scenarios identified. Therefore, when identifying specific risks, the relevant issuer should specify the timeline of the stress scenario, which should be three years for the solvency stress test and up to one year for the liquidity stress test.

(11) This Regulation is based on the draft regulatory technical standards submitted to the Commission by the European Banking Authority (EBA).

(12) The EBA has conducted open public consultations on the draft regulatory technical standards upon which this Regulation is based, analysed the potential related costs and benefits and requested the advice of the Banking Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1093/2010 of the European Parliament and of the Council (3),

HAS ADOPTED THIS REGULATION:

Article 1

Scope of application

This Regulation applies to the following issuers of asset-referenced tokens or e-money tokens:

(a) issuers of asset-reference tokens;

(b) electronic money institutions issuing significant e-money tokens;

(c) electronic money institutions issuing e-money tokens that are not significant, where required by the competent authority under Article 58(2) of Regulation (EU) 2023/1114.

Article 2

Procedure

(a) the amount by which the own funds must be increased and the percentage higher than the amount of reserve of assets resulting from the application of Article 35(1), first subparagraph, point (b), of Regulation (EU) 2023/1114;

(b) relevant reasoning as to the higher degree of risk;

(c) whether that higher degree of risk can have a material impact on the financial situation of the issuer or on the financial stability of the wider financial system;

(d) whether that higher degree of risk is independent from the relevant issuer’s governance or business model;

(e) the timeframe within which the relevant issuer shall increase its own funds in accordance with Article 3.

(a) time-bound steps, specific measures and procedures to carry out the increase within the set timeframe;

(b) the confirmation that the envisaged use of own funds items and instruments to comply with the increased requirement fully meet the conditions set out in Article 35(2) of Regulation (EU) 2023/1114.

Article 3

Timeframe

Article 4

Criteria

When adopting the decision referred to in Article 35(3) of Regulation (EU) 2023/1114, the competent authority shall consider all the following risk assessment criteria:

(a) whether the issuer of asset-referenced tokens or e-money tokens is likely to breach the requirements referred to in Article 34(1), (8) and (10) and Articles 36 to 39 of Regulation (EU) 2023/1114 within the following 12 months by assessing whether there are potential deficiencies or weaknesses of the issuer of asset-referenced tokens or e-money tokens in applying all the requirements set out in Article 34 and in Articles 36 to 39 of Regulation (EU) 2023/1114;

(b) whether redemption at par value and market value is ensured in normal or in stressed market circumstances;

(c) whether there is an increased risk of a significant deterioration of the value of the reserve assets or the financial situation of the issuer of asset-referenced tokens or e-money tokens;

(d) whether there is an increased operational risk arising from systems including the underlying distributed ledger and any trading platform, market infrastructure or payment system used for the issuance or the transfer of the token and from other third party crypto assets service providers such as custodians, which the tokens or reserve assets might rely on.

Article 5

Design of stress testing programme

(a) the effectiveness of the programme in meeting its intended purposes;

(b) the need for improvements;

(c) the identified risk factors, reasoning for and design of relevant scenarios, model assumptions and the sensitivity of results to these assumptions, as well as the role of expert judgement to ensure that it is accompanied by sound analysis;

(d) the model performance, including its performance on out-of-sample data, such as data that were not used for model development;

(e) how to incorporate possible solvency-liquidity adverse loops;

(f) the adequacy of possible interlinkages between solvency stress tests and liquidity stress tests;

(g) feedback received from competent authorities in the context of their supervisory or other stress tests;

(h) the adequacy of the data infrastructure (systems implementation and data quality);

(i) the appropriate level of involvement of senior management and the management body;

(j) all assumptions including business and/or managerial assumptions, and management actions envisaged, based on the purpose, type and result of the stress testing, including an assessment of the feasibility of management actions in stress situations and a changing business environment;

(k) the adequacy and transparency of the relevant documentation.

Article 6

Type of stress testing

Article 7

Minimum frequency of the different stress testing exercises