Standardised test for the classification of crypto-assets

Competent authorities and other persons to whom these Guidelines are addressed should apply a common approach to determine the classification of a crypto-asset on a case-by-case basis taking into account all the attributes of the token in question in accordance with the flow chart provided in Annex C.

Competent authorities and other persons to whom these Guidelines are addressed should determine if there is a digital representation of a value or right, these being the necessary attributes of a crypto-asset as defined in Article 3(1) point (5) of Regulation (EU) 2023/1114. The terms ‘value’ and ‘right’ should be interpreted broadly in accordance with recital (2) of that Regulation. Crypto-assets with no-intrinsic value, but having a value attributed to them by the seller / buyer or by market participants¹⁸ should be treated as digital representations of value.

¹⁸ For example tokens such as Bitcoin and so-called ‘meme coins’ traded at exchanges with public prices.

Competent authorities and other persons to whom these Guidelines are addressed should also assess if the digital representation of the value and/or right can be transferred and stored electronically using distributed ledger technology (DLT) or similar technologies. A token may be considered ‘non-transferable’ only where at least the following conditions are satisfied (i) the token is accepted only by the issuer or offeror, and (ii) there is no technical possibility for the token to be transferred by a holder to persons other than the issuer or offeror (recital (17) of Regulation (EU) 2023/1114). To assess if a technology is similar to DLT the functional attributes of such technology should be considered, including the basis on which the records (the ledger) are held, shared and how consensus is achieved (i.e. the functioning of any consensus mechanism).

If both elements (digital representation of a value and/or right, and transferred and stored electronically using DLT or similar technology) are satisfied competent authorities and other persons to whom these Guidelines are addressed should consider that the token is compatible with a crypto-asset for the purposes of Regulation (EU) 2023/1114.

In order to determine if the crypto-asset is within the scope of Regulation (EU) 2023/1114, competent authorities and other persons to whom these Guidelines are addressed should assess all of the exclusions identified in Article 2, points (2) to (4) of Regulation (EU) 2023/1114:

• a. Article 2(2): is the issuer or offeror a person referred to in that paragraph? MiCAR does not apply to persons who provide crypto-asset services exclusively for their parent companies, for their own subsidiaries or for other subsidiaries of their parent companies; liquidators or administrators acting in the course of an insolvency procedure (except for the purposes of Article 47 of MiCAR); the ECB, central banks of the Member States when acting in their capacity as monetary authorities, or other public authorities of the Member States; the European Investment Bank and its subsidiaries; the European Financial Stability Facility and the European Stability Mechanism; public international organisations.
• b. Article 2(3): is the crypto-asset unique and not fungible with other crypto-assets?¹⁹ In assessing if the crypto-asset is unique and not fungible, competent authorities and other persons to whom these Guidelines apply should have regard to Article 2(3) and recital (11) of Regulation (EU) 2023/1114 as well as the Guidelines on the conditions and criteria for the qualification of crypto-assets as financial instruments.²⁰
• c. Article 2(4): does the crypto-asset qualify as a relevant product enlisted in that paragraph? Regulation (EU) 2023/1114 does not apply to financial instruments, deposits, structured deposits, funds (except e-money tokens), securitisation positions (per Regulation (EU) 2017/2402²¹ ), insurance products and reinsurance contracts (per Directive 2009/138/EC), pension products primarily providing retirement income, officially recognised occupational pension schemes (per Directives (EU) 2016/2341²² and 2009/138/EC²³ ), employer-mandated individual pension products, pan-European Personal Pension Products (per Regulation (EU) 2019/1238²⁴ ), and social security schemes (per Regulations (EC) No 883/2004²⁵ and (EC) No 987/2009²⁶ ).

¹⁹ This may include, for example, a non-fungible crypto-asset evidencing an exclusive property right in a specific tangible asset in real estate (such as a house or commercial property), or intangible asset such as a patent.

²⁰ Link to be added once ESMA GL are final (for the consultation paper, see ESMA75-453128700-52).

²¹ Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012 (OJ L 347, 28.12.2017, p. 35).

²² Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORPs) (OJ L 354, 23.12.2016, p. 37).

²³ Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335, 17.12.2009, p. 1 ).

²⁴ Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on a pan-European Personal Pension Product (PEPP) (OJ L 198, 25.7.2019, p. 1).

²⁵ Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (OJ L 166, 30.4.2004, p. 1).

²⁶ Regulation (EC) No 987/2009 of the European Parliament and of the Council of 16 September 2009 laying down the procedure for implementing Regulation (EC) No 883/2004 on the coordination of social security systems (OJ L 284, 30.10.2009, p. 1).

Without prejudice to any other relevant materials, the information referred to in paragraph 13 of these Guidelines should be taken into account for the purposes of assessing whether the crypto-asset is a:

• a. financial instrument, competent authorities and other persons to whom these Guidelines are addressed should apply the Guidelines issued by the European Securities and Markets Authority under Article 2(5) of Regulation (EU) 2023/1114;²⁷
• b. deposit, competent authorities and other persons to whom these Guidelines are addressed should refer to European Banking Authority’s 2014 Opinion and Report and 2020 Opinion on the perimeter of credit institutions, which provide indications on the notion of ‘deposit’²⁸ and to the EBA’s 2024 Report on structured deposits²⁹ ;
• c. insurance product or insurance contract, competent authorities and other persons to whom these Guidelines are addressed should recall that there is no explicit definition of insurance at EU level, either as an activity or a contract.³⁰

²⁷ Link to be added once ESMA GL are final (for the consultation paper, see ESMA75-453128700-52).

²⁸ EBA 2014 Opinion and Report on the perimeter of credit institutions: https://www.eba.europa.eu/publications-and-media/press-releases/eba-publishes-opinion-perimeter-credit-institutions and EBA 2020 Opinion: https://www.eba.europa.eu/sites/default/files/document_library/Publications/Opinions/2020/931784/EBA%20Opinion%2 0on%20elements%20of%20the%20definition%20of%20credit%20institution.pdf

²⁹ EBA 2024 Report on structured deposits: https://www.eba.europa.eu/sites/default/files/2024-07/b807c1a8-6f1d-4c2b-b2a0-2cdcb7737282/Report%20on%20structured%20deposits.pdf

³⁰ Final Report of the Commission Expert Group on European Insurance Contract Law. European Commission, 2014, p 38 ff.

If none of the exclusions referred to in paragraph 22 apply, competent authorities and other persons to whom these Guidelines are addressed should assess the characteristics of the crypto-assets to determine if the crypto-asset is an EMT, ART or other crypto-asset under Regulation (EU) 2023/1114 and should take into account the following:

• a. Does the crypto-asset purport to maintain a stable value by referencing only the value of a single official currency? If so, it is to be classified as an EMT pursuant to Title IV of Regulation (EU) 2023/1114.
• b. If the crypto-asset does not purport to maintain a stable value by referencing only the value of a single official currency, does it purport to maintain a stable value by reference to another value or right (or combination thereof), including one or more official currencies? If so, it is to be classified as an ART pursuant to Title III of Regulation (EU) 2023/1114.
• c. If the crypto-asset does not purport to maintain a stable value by referencing another value or right (and is therefore not an ART or EMT) it is to be classified as a crypto-asset pursuant to Title II of Regulation (EU) 2023/1114.