The European Banking Authority (EBA) today published a Report to facilitate awareness of tokenised deposits, as well as assess their potential benefits and challenges. The Report also aims to promote convergence in the classification of tokenised deposits in contrast with electronic money tokens (EMTs) issued by credit institutions under the Markets in Crypto-Assets Regulation (MiCAR).
As part of the EBA’s 2024-25 priorities on innovative applications, the EBA has analysed approaches to the tokenisation of deposits by credit institutions and their potential benefits and challenges. The tokenisation of a deposit – in the narrow sense of recording the deposit claim of a depositor against the credit institution on the distributed ledger technology (DLT) instead of a traditional ledger – does not per se alter the fundamental nature of the claim and thus its regulatory qualification as a deposit.
To-date, the EBA has identified very few cases of tokenised deposits. Meanwhile, interest from credit institutions appears to be growing. Potential benefits include programmability and automation of transfers, while potential challenges include issues relating to consumer protection, operational risk, and the application of the anti-money laundering and countering the financing of terrorism framework.
In this light, the EBA will continue to monitor market developments and promote discussion on potential benefits and challenges, as well as on issues relating to regulatory classification as compared to EMTs, which are in scope of MiCAR.
Background and next steps
The EBA has a statutory duty to monitor and assess market developments, including technological innovation and innovative financial services in accordance with Article 9(2) of its Founding Regulation (Regulation (EU) 1093/2010). The EBA’s priorities on innovative applications for 2024-25 included the monitoring of tokenisation, specifically with regard to tokenised deposits.
The acceptance of deposits and other repayable funds from the public characterises the activity of credit institutions in the EU and the consequent regulatory treatment under the Capital Requirements Directive and Regulation (Directive (EU) 2013/36/EU and Regulation (EU) 575/2013). Therefore, activities involving tokenised deposits, since already regulated, are excluded from the scope of MiCAR.
The EBA, together with the other European Supervisory Authorities, are tasked to promote convergence on the classification of crypto-assets, including those excluded from the scope of MiCAR, as per Article 97 of that Regulation.
The EBA will continue to monitor market developments as part of its ongoing monitoring of innovative activities in the EU banking and payments sector.
This year’s Human Rights Tulip has been awarded to Community Peacemaker Teams in the autonomous Kurdistan Region in Iraq. Minister of Foreign Affairs Caspar Veldkamp presented the award on 12 December in the Peace Palace.
Enlarge imageKamaran Othman accepted the Human Rights Tulip on behalf of Community Peacemaker Teams. Othman: ‘Our human rights work requires us to stand by each other, shoulder to shoulder, and fight against all the oppression and injustice that we live with day to day.’
The Human Rights Tulip
The Human Rights Tulip is an annual award presented by the Dutch Ministry of Foreign Affairs to a human rights defender to support them in their work advancing, protecting and raising awareness about human rights around the world. The winner of the Human Rights Tulip receives a bronze tulip sculpture and €100,000 – money that the winner can use to continue and expand their human rights work.
Community Peacemaker Teams’ work in Iraqi Kurdistan
Community Peacemaker Teams – Iraqi Kurdistan (CPT-IK) supports people in conflict areas and works with local communities affected by violence, injustice or repression. As a human rights organisation, CPT-IK speaks out about military activities in the Kurdistan Region and promotes nonviolent methods of conflict resolution and peacebuilding. CPT-IK’s work rests on a foundation of reliable data, which it believes is necessary for honest dialogue on sensitive issues.
Although the team consists of only three people, it has proved capable of documenting and verifying a great number of human rights violations – thanks to an extensive network of reliable partners.
Kamaran Othman of CPT: ‘How, with only three people, can you collect all this information? The answer is simple: We have tea with people. A lot of tea. This is how we can collect data, amplify the voices of the unheard and gain support for our work.’
CPT advocates for victims of military violence in the Kurdistan Region by supporting displaced families, reporting damage caused by military attacks and fighting for compensation and protection for civilian victims. CPT-IK also helps journalists and activists working nonviolently to give people better lives.
The prize money will enable the organisation to further expand its efforts to promote peace, security and justice in the Kurdistan Region of Iraq.
Kamaran Othman of CPT: ‘This award is not just about recognising the work of Community Peacemaker Teams – Iraqi Kurdistan but about the people who, despite suffering extraordinary and painful circumstances, continue to resist through nonviolent means back home in Iraqi Kurdistan.’
Other nominees
This year four other candidates were nominated for the Human Rights Tulip as well: Wilker Dias (a human rights defender in Mozambique), Stella Maris Martínez (Chief Public Defender of Argentina), Vasile Micleusanu (an LGBTIQ+ human rights defender in Moldova) and Blert Morina (an LGBTIQ+ activist in Kosovo).
Three years of Russian aggression have taken a heavy toll on the people of Ukraine. Ukrainian civilians have been killed, wounded, tortured, raped and abducted. Entire neighbourhoods, hospitals and key infrastructure have been destroyed. The Netherlands believes that justice must be done and the perpetrators of these crimes must be held responsible. The UN Human Rights Monitoring Mission (HRMMU) makes a crucial contribution to this.
Enlarge imageDanielle Bell (head of the UN Human Rights Monitoring Mission in Ukraine) and Erica Schouten (Special Envoy for Ukraine).
On 10 December, during International Human Rights Day, we celebrate the fundamental freedoms that everyone is entitled to, such as the right to safety, the right to work and the right to go to school. Unfortunately, these rights are not available to everyone everywhere. In an increasing number of countries, human rights are under pressure, including in Ukraine, where people are subjected to human rights violations every day.
‘The stories that we have been told are truly sickening’, says Danielle Bell, head of the UN Human Rights Monitoring Mission in Ukraine. ‘We spoke to people that had been subjected to torture, ill-treatment, and sexual violence. Sometimes on a daily basis. We are seeing an increase in civilian casualties from glide bombs and first-person view drones. In occupied territory, we see the indoctrination of schools, where children are not allowed to speak Ukrainian, and forced to learn the Russian curriculum and work for military groups.’
UN Human Rights Monitoring Mission in Ukraine
HRMMU reports on the human rights situation in Ukraine. The aim of the mission is to strengthen and protect human rights in Ukraine and ensure that those who commit human rights violations are held responsible.
The Netherlands stands for a world in which human rights are respected and perpetrators are held responsible for their actions. Only then, people can live in peace and security. That’s why the Netherlands is committed to supporting the UN Human Rights Monitoring Mission in Ukraine (HRMMU). Yesterday, Erica Schouten, Special Envoy for Ukraine, announced that over the next two years the Netherlands will be making €8 million available for this mission.
‘HRMMU’s investigative work is of great importance to Ukraine’, Schouten explains. ‘Their work is impartial, accurate, credible and reliable, and their findings are used in national and international investigations into violations of human rights and international law. HRMMU makes a crucial contribution to establishing the truth and preventing impunity.’
Danielle Bell.
Erica Schouten.
Disturbing trends
Since the large-scale Russian invasion, more than 10,000 Ukrainian civilians have been killed and more than 20,000 have been injured. Entire neighbourhoods and villages have been destroyed, and hospitals, schools and infrastructure lie in ruins. Large-scale attacks on power plants cause power outages and limit people’s access to water, heating and the internet.
In 2024, HRMMU recorded a dramatic increase in Ukrainian citizens that were killed or were injured by the war, says Bell. ‘This year, civilian casualties have increased by 30%. In September, we recorded the highest number of causalities since mid-2022. A disturbing trend that we are seeing in Ukraine is the usage of new weapons, and weapons that are used more destructively. This causes a dramatic increase in civilians that are harmed.’
The situation is also dire in detention facilities in occupied territories and in the Russian Federation, Bell continues. ‘We spoke to prisoners of war that had been beaten with metal rods. They showed us where their bones had been broken. And they showed scars on their body, where they had been bitten by dogs, or burned by a cigarette. Each person we interview, adds another layer of the horror that is unfolding in these detention facilities everyday.’
Bear witness
HRMMU teams are in Ukraine to document such human rights violations and infringements of international humanitarian law. Their reports can be used as evidence in court cases and give the international community reliable insight into the human rights situation in Ukraine.
HRMMU has done more than 300 missions this year, including more than 100 to frontline areas. ‘We talk to people in their homes about what is happening to them. About the everyday realities of war’, Bell explains. ‘This means that my team can put on public record what is unfolding every day as a consequence of this horrible conflict.’
‘HRMMU’s work is not just about collecting data and evidence. It’s also about the stories behind the numbers’, Schouten adds. ‘These are stories that need to be heard. We owe it to the victims and their families. These crimes must be documented, because justice is also about acknowledgement: “This is what happened.” And we, the international community, must bear witness.’
Enlarge imageErica Schouten during a diplomatic briefing on accountability efforts for Ukraine.
Support for justice in Ukraine
The Netherlands, as lead nation on restoring justice, point 7 of the Ukrainian Peace Formula actively supports Ukraine in ensuring accountability. Since the beginning of the Russian war, the Netherlands has made more than €105 million available for that purpose. The Netherlands also supports the investigations of international crimes conducted by the International Criminal Court and the prosecution service of Ukraine, and it is working to facilitate international coordination and information sharing, for example via the Dialogue Group on Accountability for Ukraine.
The Netherlands is also the host state of the Register of Damage for Ukraine and the International Centre for the Prosecution of the Crime of Aggression against Ukraine (ICPA), which are based in The Hague. The Netherlands also supports the establishment of a special tribunal for the crime of aggression and has offered to host this tribunal in The Hague.
The three European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today published joint Guidelines intended to facilitate consistency in the regulatory classification of crypto-assets under MiCAR. The Guidelines include a standardised test to promote a common approach to classification as well as templates market participants should use when communicating to supervisors the regulatory classification of a crypto-asset.
To support market participants and supervisors in adopting a convergent approach to the classification of crypto-assets the templates for explanations and legal opinions provide descriptions of the regulatory classification of crypto-assets in the following cases:
Asset-referenced tokens (ARTs): The white paper for the issuance of ARTs must be accompanied by a legal opinion that explains the classification of the crypto-asset – in particular, the fact it is not an electronic money token (EMT) nor a crypto-asset excluded from the scope of MiCAR.
Crypto-assets that are not ARTs or EMTs under MiCAR: The white paper for the crypto-asset must be accompanied by an explanation of the classification of the crypto-asset – in particular, the fact that it is not an EMT, an ART or crypto-asset excluded from the scope of MiCAR.
The overall aim of these Guidelines is to promote convergence in classification for the consistent application of MiCAR across the EU. In turn, this is intended to contribute to enhancing consumer/investor protection, securing a level playing field, and mitigating risks of regulatory arbitrage. These guidelines will be translated into the official EU languages and published on the ESAs’ websites. The guidelines will apply from three months after the publication of the translations.
Standardised test for crypto-assets
Background and next step
The Guidelines have been developed in accordance with Article 97(1) of the Regulation on Markets in Crypto-assets (MiCAR) (Regulation (EU) 2023/1114) which requires the ESAs, by 30 December 2024, to jointly issue Guidelines in accordance with Article 16 of the ESA Founding Regulations (Regulation (EU) No 1093/2010, Regulation 1094/2010, Regulation 1095/2010) to specify the content and form of the explanation accompanying the crypto-asset white paper referred to in Article 8(4), and the legal opinions on the qualification of asset-referenced tokens (ARTs) referred to in Article 17(1), point (b)(ii), and Article 18(2), point (e) of MiCAR. The Guidelines are required to include a template for the explanation and the opinion and a standardised test for the classification of crypto-assets. This is the only joint ESA policy mandate under MiCAR.
MiCAR establishes regimes for regulating the issuance, offering to the public, and admission to trading of ARTs and EMTs and other crypto-assets. The Regulation also establishes a framework for crypto-asset service provision.
The regime for ARTs and EMTs established by MiCAR entered into application at the end of June 2024, with other parts of the Regulation (issuance of other types of crypto-assets, and crypto-asset service provision) entering into application at end-2024.
On December 6, 2024, The Hague Peace Projects, in collaboration with the Institute of Social Studies and the Phanaar Organisation, organised an independent event with the theme: ‘Wars and Prospects for Building the New State in Sudan: Challenges and Opportunities.’
Contrary to disinformation currently circulating, the Ministry of Foreign Affairs emphasises that it was in no way involved in organising this event or in facilitating the participation of invited speakers. Furthermore, no speakers were received by or present at the Ministry of Foreign Affairs.
On December 6, 2024, The Hague Peace Projects, in collaboration with the Institute of Social Studies and the Phanaar Organisation, organised an independent event with the theme: ‘Wars and Prospects for Building the New State in Sudan: Challenges and Opportunities.’
Contrary to disinformation currently circulating, the Ministry of Foreign Affairs emphasises that it was in no way involved in organising this event or in facilitating the participation of invited speakers. Furthermore, no speakers were received by or present at the Ministry of Foreign Affairs.
The European Banking Authority (EBA) today launched a public consultation on its draft Regulatory Technical Standards (RTS) clarifying and enhancing the conditions for assessing material model changes (MMC) and extensions following a review of the related Delegated Regulation. This review aimed to align the existing RTS with the amendments brought in by the Capital Requirements Regulation (CRR 3), and to introduce amendments to enhance the supervisory effectiveness of the approval process for model changes. The consultation runs until 10 March 2025.
Under the CRR, institutions shall apply for approval from their competent authorities prior to implementing material extensions and changes to their internal approaches. As such, the CRR differentiates between material extensions or material changes, which are subject to approval, and other extensions or changes, which are only subject to notification. The Delegated Regulation on MMC specifies the conditions for assessing material model changes and extensions.
Responses to this consultation can be sent to the EBA by clicking on the “send your comments” button on the consultation page. Please note that the deadline for the submission of comments is 10 March 2025.
A public hearing will take place via conference call on 15 January 2025 from 15:00 to 16:00 CET. The deadline for registration is the 10 January 25, 16:00 CET.
All contributions received will be published after the consultation closes, unless requested otherwise.
Legal basis and next steps
These draft RTS have been developed according to Article 143(5) of Regulation (EU) 2024/1623 (CRR3), which mandates the EBA to specify the conditions for assessing the materiality of the use of an existing rating system for other additional exposures not already covered by that rating system and changes to rating systems under the internal ratings-based approach (IRB) Approach.
The mandate in Article 143(5) of Regulation (EU) 2024/1623 is very similar to the mandate in Article 143(5) of Regulation (EU) No 575/2013, which constitutes the legal basis for the existing Delegated Regulation.
As part of the next steps, the EBA is conducting a review to identify any potential unnecessary regulatory constraints on competent authorities and institutions leading to delays in the implementation of model changes by institutions. This may include the interaction of the RTS on MMC with the RTS on the assessment methodology for competent authorities used to approve material model changes in accordance with Articles 144(2), 173(3) and 180(3) of Regulation (EU) 2024/1623.
The European Banking Authority (EBA) today published its final draft Regulatory Technical Standards (RTS) on the method for identifying the main risk driver and determining whether a transaction represents a long or a short position. These RTS are part of the Phase 1 deliverables of the EBA roadmapon the implementation of the EU banking package in the area of market risk.
The proposed general method to identify the main risk drivers hinges on sensitivities defined under the market risk standardised approach (FRTB-SA) or on add-ons defined under the standardised approach for counterparty credit risk (SA-CCR). For the determination of the direction of the positions, the methodology is aligned with the one set out in the RTS on SA-CCR.
A simplified method has also been included, covering relatively simple instruments, such as fixed-rate bonds, floating-rate notes, stocks, forwards, futures, simple swaps and plain vanilla options.
Legal basis and background
These draft RTS have been developed according to Article 94(10) of Regulation (EU) No 575/2013 (Capital Requirements Regulation – CRR), as amended by the revised Capital Requirements Regulation (CRR3), which mandates the EBA to specify the method for identifying the main risk driver of a position and for determining whether a transaction represents a long or a short position as referred to in Art. 94(3), 273a(3) and 325a(2). In developing these draft RTS, the EBA has taken into consideration the method for determining whether a transaction is a long or short position in the primary risk driver or in the most material risk driver, developed for the RTS on SA-CCR in accordance with Art. 279a(3), point (b), of the CRR.
The CRR includes some derogations for the calculation of the capital requirements for market and counterparty credit risks, for small trading book business, derivative business or business subject to market risk. The CRR3 specifies that the size of the business shall be equal to the absolute value of the aggregated long position, summed with the absolute value of the aggregated short position. A position can be considered as long or short depending on how movements in its main risk driver affect the market value.
The new EU digital rulebook touches all dimensions of the digital economy. It aims to significantly improve competition and consumer protection in areas such as digital platforms, AI, product safety and data. However, this extensive regulatory framework might hinder unnecessarily SMEs due to overlaps and inconsistencies. Today, Minister Dirk Beljaarts of Economic Affairs of the Netherlands called on the European Commission to address better digital regulation together with Belgium, Germany, Estonia, Finland, Greece, Ireland, Slovakia and Sweden at the EU Telecommunications Council (TTE) in Brussels.
In the most recent Competitiveness Council the EU ministers agreed that a 25% reduction in regulatory burden should indeed be a common target for the new European Commission. The Netherlands therefore endorses the initiative of new EU Commissioner Virkkunen to analyze whether the digital rulebook is fit for purpose and identify whether the digital acquis reflects the needs of SMEs. As far as the Netherlands is concerned, preferably within the first 100 days of the new Commission.
Minister Dirk Beljaarts (Economic Affairs): “A comprehensive rulebook regarding the EU digital internal market is important to all entrepreneurs. To achieve growth opportunities, to promote fair digital competition and to improve and enhance consumer protection. Now that the regulatory framework touches all dimensions of the digital economy, the coming period should be used to take stock and take action.”
The minister continues: “SMEs that do digital business, for example, often do not know where to start and have no legal capacity either. So how do you know which digital rulebook applies to you and what that means for your business? We need to determine if it’s fit for purpose and tackle regulatory burden. And if there are inconsistencies or overlaps in the digital acquis, the removal of these can be addressed at EU level.”
The nine EU member states, including the Netherlands, are calling on the European Commission to invest in targeted panel discussions with digital SMEs to identify disproportionate burdens. But also to gather examples of legal definitions of often used terms in the digital acquis such as: ‘platform’, ‘data’ and ‘systemic risk’. And to consider using AI through large language models to identify areas for consolidation and simplification in the digital rulebook.
Example: a cybersecurity company
An EU cybersecurity entrepreneur is increasingly applying artificial intelligence (AI) technology – which they develop themselves – in their product and selling it to telecom companies, banks and governments within the EU. As a result, within a few years, they will have to comply for example with the regulatory framework for privacy protection (GDPR), AI Act, cybersecurity directives, the Data Act but also the sectoral rules that apply to their customer.
The European Banking Authority (EBA) today launched a public consultation on draft Regulatory Technical Standards (RTS) specifying the criteria according to which crypto-asset service providers (CASPs) should appoint a central contact point to ensure compliance with local anti-money laundering and countering the financing of terrorism (AML/CFT) obligations of the host Member State. This consultation runs until 4 February 2025.
CASPs can provide services in other Member States through establishments other than branches. Once established, CASPs have to comply with local AML/CFT obligations, even if their establishments are not ‘obliged entities’ themselves. This can make the AML/CFT supervision of services provided through these establishments difficult.
To address this, the draft RTS sets out the criteria for determining the circumstances in which the appointment of a central contact point is appropriate, as well as the functions of those central contact points. Since the same considerations apply to electronic money issuers (EMI) and payment service providers (PSPs) as they do to CASPs, the EBA proposes to retain the structure and approach set out in Commission Delegated Regulation (EU) 2018/1108 and extend existing provisions to CASPs (leaving the provisions that apply to EMIs and PSPs unchanged), while also introducing new provisions for CASPs where this is necessary in light of their business model and operation.
Consultation process
Comments to the consultation paper can be sent by clicking on the “send your comments” button on the EBA’s consultation page. The deadline for the submission of comments is 4 February 2025.
The EBA will hold a virtual public hearing on the consultation paper on 16 January 2024 from 15:00 to 17:00 Paris time. The EBA invites interested stakeholders to register using this link by 3 January 2023 at 16:00 CET. The dial-in details will be communicated to those who have registered for the meeting.
All contributions received will be published following the end of the consultation unless requested otherwise.
Legal basis, background
Article 45(10) of Directive (EU) 2015/849 requires the EBA to develop RTS setting out the criteria for determining the circumstances in which the appointment of a central contact point is appropriate, and the functions of the central contact points.
A first version of such draft regulatory standards was issued in 2017. This Commission Delegated Regulation (EU) 2018/1108 was published in the Official Journal of the EU in 2018. The scope was limited to EMIs and PSPs.
Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets applies from 30 December 2024. It amends Directive (EU) 2015/849, inter alia by extending its scope to crypto-asset service providers. Consequently, Article 45(9) of this Directive extends provisions that Member States may require EMIs and PSPs established on their territory in forms other than a branch, and whose head office is situated in another Member State, to appoint a CCP point in their territory to CASPs. This means that the EBA has to update the Commission Delegated Regulation (EU) 2018/1108.
