Drafting Legal Opinions for Asset-Referenced Tokens under MiCA

The rise of digital finance has prompted the European Union to introduce the Markets in Crypto-Assets Regulation (MiCA). For credit institutions aiming to offer asset-referenced tokens to the public, this represents a significant regulatory milestone. Clear directives are now in place, requiring a deep understanding of the token's classification, particularly its distinction from other financial instruments and e-money tokens.

By definition, an asset-referenced token is a type of crypto-asset that, while not being an e-money token, seeks to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies. 

Credit institutions that wish to offer asset-referenced tokens to the public or admit them to trading must, among other things, notify the respective competent authority at least 90 working days before issuing the token for the first time. The notification must be accompanied by a legal opinion confirming that the asset-referenced token neither qualifies as a crypto-asset excluded from the scope of MiCA (e.g., a financial instrument) nor as an e-money token. 

In crafting a legal opinion as described, it is essential that the document is both comprehensive and precise. Firstly, the opinion should provide a detailed analysis of the asset-referenced token's design and operational mechanics, highlighting its distinct characteristics. The underlying reference values or rights that the token is linked to should be explicitly identified and explained. As a result, it should be clear why the token does not qualify as an e-money token, which can be achieved through a comparative analysis. In addition, clarity is needed on why the token does not fall under categories excluded from MiCA's ambit. Consequently, it must be described why the token does not represent a financial instrument, deposit, fund or other asset specified in Article 2 (4) MiCA. Throughout the legal opinion, the language should be unambiguous, ensuring that the competent authority can readily understand and accept the classification arguments presented.

By 30 December 2024, the Joint Committee of the three European Supervisory Authorities (ESA) will release guidelines to assist in formulating the content and structure of the legal opinion. These guidelines will provide a template for the explanation and a standardized test for classifying crypto-assets.

As a law firm specializing in crypto law, we are well-positioned to craft this legal opinion for you. We are committed to ensuring that the document is thorough, aligns with MiCA's requirements and stands up to regulatory scrutiny.