### (10) despite their similarities , electronic money and crypto-assets referencing a single fiat currency differ in some important aspects. holders of electronic money as defined in article 2 , point 2 , of directive 2009/110/ec are always provided with a claim on the electronic money institution and have a contractual right to redeem their electronic money at any moment against fiat currency that is legal tender at par value with that currency. by contrast , some of the crypto-assets referencing one fiat currency which is legal tender do not provide their holders with such a claim on the issuers of such assets and could fall outside the scope of directive 2009/110/ec. other crypto-asset referencing one fiat currency do not provide a claim at par with the currency they are referencing or limit the redemption period. the fact that holders of such crypto-assets do not have a claim on the issuers of such assets , or that such claim is not at par with the currency those crypto-assets are referencing , could undermine the confidence of users of those crypto-assets. to avoid circumvention of the rules laid down in directive 2009/110/ec , any definition of ‘e-money tokens’ should be as wide as possible to capture all the types of crypto-assets referencing one single fiat currency that is legal tender. to avoid regulatory arbitrage , strict conditions on the issuance of e-money tokens should be laid down , including the obligation for such e-money tokens to be issued either by a credit institution as defined in regulation (eu) no 575/2013 of the european parliament and of the council36 , or by an electronic money institution authorised under directive 2009/110/ec. for the same reason , issuers of such e-money tokens should also grant the users of such tokens with a claim to redeem their tokens at any moment and at par value against the currency referencing those tokens. because e-money tokens are also crypto-assets and can also raise new challenges in terms of consumer protection and market integrity specific to crypto-assets , they should also be subject to rules laid down in this regulation to address these challenges to consumer protection and market integrity. ### (10) despite their similarities , electronic money and crypto-assets referencing a single fiat currency differ in some important aspects. holders of electronic money as defined in article 2 , point 2 , of directive 2009/110/ec are always provided with a claim on the electronic money institution and have a contractual right to redeem their electronic money at any moment against fiat currency that is legal tender at par value with that currency. by contrast , some of the crypto-assets referencing one fiat currency which is legal tender do not provide their holders with such a claim on the issuers of such assets and could fall outside the scope of directive 2009/110/ec. other crypto-asset referencing one fiat currency do not provide a claim at par with the currency they are referencing or limit the redemption period. the fact that holders of such crypto-assets do not have a claim on the issuers of such assets , or that such claim is not at par with the currency those crypto-assets are referencing , could undermine the confidence of users of those crypto-assets. to avoid circumvention of the rules laid down in directive 2009/110/ec , any definition of ‘e-money tokens’ should be as wide as possible to capture all the types of crypto-assets referencing one single fiat currency that is legal tender. to avoid regulatory arbitrage , strict conditions on the issuance of e-money tokens should be laid down , including the obligation for such e-money tokens to be issued either by a credit institution as defined in regulation (eu) no 575/2013 of the european parliament and of the council36 , or by an electronic money institution authorised under directive 2009/110/ec. for the same reason , issuers of such e-money tokens should also grant the users of such tokens with a claim to redeem their tokens at any moment and at par value against the currency referencing those tokens. e-money tokens should reference any global currency that is legal tender. because e-money tokens are also crypto-assets and can also raise new challenges in terms of consumer protection and market integrity specific to crypto-assets , they should also be subject to rules laid down in this regulation to address these challenges to consumer protection and market integrity. however , since the various crypto-assets pose different risks and challenges for national economies , partly because of unknown factors in determining their value , stabilising crypto-assets to a single legal currency provides more secure uses for consumers and investors.


### (11) given the different risks and opportunities raised by crypto-assets , it is necessary to lay down rules for issuers of crypto-assets that should be any legal person who offers to the public any type of crypto-assets or seeks the admission of such crypto-assets to a trading platform for crypto-assets. ### (11) given the different risks and opportunities raised by crypto-assets , it is necessary to lay down rules for issuers and offerors of crypto-assets.


### (29) a competent authority should refuse authorisation where the prospective issuer of asset-referenced tokens’ business model may pose a serious threat to financial stability , monetary policy transmission and monetary sovereignty. the competent authority should consult the eba and esma and , where the asset-referenced tokens is referencing union currencies , the european central bank (ecb) and the national central bank of issue of such currencies before granting an authorisation or refusing an authorisation. the eba , esma , and , where applicable , the ecb and the national central banks should provide the competent authority with a non-binding opinion on the prospective issuer’s application. where authorising a prospective issuer of asset-referenced tokens , the competent authority should also approve the crypto-asset white paper produced by that entity. the authorisation by the competent authority should be valid throughout the union and should allow the issuer of asset-referenced tokens to offer such crypto-assets in the single market and to seek an admission to trading on a trading platform for crypto-assets. in the same way , the crypto-asset white paper should also be valid for the entire union , without possibility for member states to impose additional requirements. ### (29) a competent authority should be obliged to refuse authorisation where the prospective issuer of asset-referenced tokens’ business model may pose a serious threat to financial stability , monetary policy transmission and monetary sovereignty. the competent authority should be obliged to consult the eba and esma and , where the asset-referenced tokens are referencing union currencies , the european central bank (ecb) and the national central bank of issue of such currencies before granting an authorisation or refusing an authorisation. the eba , esma , and , where applicable , the ecb and the national central banks should provide the competent authority with an opinion on the prospective issuer’s application. opinions should be non-binding with the exception of those of the ecb and the member states’ central banks on monetary policy enforcement and ensuring the secure handling of payments. where authorising a prospective issuer of asset-referenced tokens , the competent authority should also approve the crypto-asset white paper produced by that entity. the authorisation by the competent authority should be valid throughout the union and should allow the issuer of asset-referenced tokens to offer such crypto-assets in the single market and to seek an admission to trading on a trading platform for crypto-assets. in the same way , the crypto-asset white paper should also be valid for the entire union , without possibility for member states to impose additional requirements.


### (29) a competent authority should refuse authorisation where the prospective issuer of asset-referenced tokens’ business model may pose a serious threat to financial stability , monetary policy transmission and monetary sovereignty. the competent authority should consult the eba and esma and , where the asset-referenced tokens is referencing union currencies , the european central bank (ecb) and the national central bank of issue of such currencies before granting an authorisation or refusing an authorisation. the eba , esma , and , where applicable , the ecb and the national central banks should provide the competent authority with a non-binding opinion on the prospective issuer’s application. where authorising a prospective issuer of asset-referenced tokens , the competent authority should also approve the crypto-asset white paper produced by that entity. the authorisation by the competent authority should be valid throughout the union and should allow the issuer of asset-referenced tokens to offer such crypto-assets in the single market and to seek an admission to trading on a trading platform for crypto-assets. in the same way , the crypto-asset white paper should also be valid for the entire union , without possibility for member states to impose additional requirements. ### (29) a competent authority should refuse authorisation where the prospective issuer of asset-referenced tokens’ business model may pose a serious threat to financial stability , monetary policy transmission and monetary sovereignty. the competent authority should consult the eba and esma and , where the asset-referenced tokens is referencing union currencies , the european central bank (ecb) and the national central bank of issue of such currencies before granting an authorisation or refusing an authorisation. the eba , esma , and , where applicable , the ecb and the national central banks should provide the competent authority with a non-binding opinion on the prospective issuer’s application. opinions should be non-binding with the exception of those of the ecb and the member states’ central banks on monetary policy and financial stability issues. where authorising a prospective issuer of asset-referenced tokens , the competent authority should also approve the crypto-asset white paper produced by that entity. the authorisation by the competent authority should be valid throughout the union and should allow the issuer of asset-referenced tokens to offer such crypto-assets in the single market and to seek an admission to trading on a trading platform for crypto-assets. in the same way , the crypto-asset white paper should also be valid for the entire union , without possibility for member states to impose additional requirements.


### (37) in order to stabilise the value of their asset-referenced tokens , issuers of asset-referenced tokens should constitute and maintain a reserve of assets backing those crypto-assets at all times. issuers of asset-referenced tokens should ensure the prudent management of such a reserve of assets and should in particular ensure that the creation and destruction of asset-referenced tokens are always matched by a corresponding increase or decrease in the reserve assets and that such increase or decrease is adequately managed to avoid adverse impacts on the market of the reserve assets. issuers of asset-backed crypto-assets should therefore establish , maintain and detail policies that describe , inter alia , the composition of the reserve assets , the allocation of assets , the comprehensive assessment of the risks raised by the reserve assets , the procedure for the creation and destruction of the asset-referenced tokens , the procedure to purchase and redeem the asset-referenced tokens against the reserve assets and , where the reserve assets are invested , the investment policy that is followed by the issuer. ### (37) in order to stabilise the value of their asset-referenced tokens , issuers of asset-referenced tokens should constitute and maintain a reserve of assets backing those crypto-assets at all times. such reserve constitutes a guarantee to the issuer liability represented by the asset-referenced token. issuers of asset-referenced tokens should ensure the prudent management of such a reserve of assets and should in particular ensure that the creation and destruction of asset-referenced tokens are always matched by a corresponding increase or decrease in the reserve assets and that such increase or decrease is adequately managed to avoid adverse impacts on the market of the reserve assets. issuers of asset-backed crypto-assets should therefore establish , maintain and detail policies that describe , inter alia , the composition of the reserve assets , the allocation of assets , the comprehensive assessment of the risks raised by the reserve assets , the procedure for the creation and destruction of the asset-referenced tokens , the procedure to purchase and redeem the asset-referenced tokens against the reserve assets and , where the reserve assets are invested , the investment policy that is followed by the issuer.


### (51) this regulation should not affect the possibility for persons established in the union to receive crypto-asset services by a third-country firm at their own initiative. where a third-country firm provides crypto-asset services at the own initiative of a person established in the union , the crypto-asset services should not be deemed as provided in the union. where a third-country firm solicits clients or potential clients in the union or promotes or advertises crypto-asset services or activities in the union , it should not be deemed as a crypto-asset service provided at the own initiative of the client. in such a case , the third-country firm should be authorised as a crypto-asset service provider. ### (51) this regulation should not affect the possibility for persons established in the union to receive crypto-asset services by a third-country firm at their own exclusive initiative. where a third-country firm provides crypto-asset services at the own exclusive initiative of a person established in the union , the crypto-asset services should not be deemed as provided in the territory of the union. where a third-country firm solicits clients or potential clients in the union or promotes or advertises crypto-asset services or activities in the union , it should not be deemed as a crypto-asset service provided at the own exclusive initiative of the client. in such a case , the third-country firm should be authorised as a crypto-asset service provider. a practise whereby a third-country firm includes general clauses in its terms of business or through the use of online pop-up “i agree” boxes where by clients state that any transaction is executed on the exclusive initiative of the client , should not deemed as an attempt to circumvent the rules of this regulation.


### 5. without prejudice to article 30(11) , issuers of asset-referenced tokens shall mandate an independent audit of the reserve assets every six months , as of the date of its authorisation as referred to in article 19. ### 5. without prejudice to article 30(11) , issuers of asset-referenced tokens shall mandate an independent audit of the reserve assets every six months , as of the date of its authorisation as referred to in article 19.


### 1. issuers of asset-referenced tokens that invest a part of the reserve assets shall invest those reserve assets only in highly liquid financial instruments with minimal market and credit risk. the investments shall be capable of being liquidated rapidly with minimal adverse price effect. ### 1. issuers of asset-referenced tokens that invest a part of the reserve assets shall invest those reserve assets only in highly liquid financial instruments with minimal market , concentration and credit risk. the investments shall be capable of being liquidated rapidly with minimal adverse price effect.


### 1. issuers of asset-referenced tokens shall establish , maintain and implement clear and detailed policies and procedures on the rights granted to holders of asset-referenced tokens , including any direct claim or redemption rights on the issuer of those asset-referenced tokens or on the reserve assets. ### 1. issuers of asset-referenced tokens shall redeem these tokens at the request of any holder at all times at a price that is not lower than the face value of the holder’s claim on the issuer.


### 1. issuers of asset-referenced tokens shall establish , maintain and implement clear and detailed policies and procedures on the rights granted to holders of asset-referenced tokens , including any direct claim or redemption rights on the issuer of those asset-referenced tokens or on the reserve assets. ### 1. issuers of asset-referenced tokens shall establish , maintain and implement clear and detailed policies and procedures on the rights granted to holders of asset-referenced tokens , including direct claim or redemption rights on the issuer of those asset-referenced tokens or any direct claim or redemption rights on the reserve assets.


### 2. where holders of asset-referenced tokens are granted rights as referred to in paragraph 1 , issuers of asset-referenced tokens shall establish a policy setting out: ### 2. by way of derogation from paragraph 1: (a) the issuer of an asset-referenced token may , in accordance with the applicable national law and subject to the conditions set out in the crypto-asset white paper , temporarily suspend the redemption of its tokens. in the event of a temporary suspension , the issuer shall , without delay , communicate its decision to its home member state competent authorities. (b) the issuer’s home member state may allow its competent authorities to require the suspension of the redemption of tokens in the interest of the tokenholders or of the public. the temporary suspension referred to in point (a) of the first subparagraph shall be provided for only in exceptional cases where circumstances so require and where suspension is justified having regard to the interests of the tokenholders.


### the fees applied by the issuers of asset-referenced tokens when the holders exercise those rights. ### deleted


### the fees referred to in point (e) shall be proportionate and commensurate with the actual costs incurred by the issuers of asset-referenced tokens. ### deleted


### 3. where issuers of asset-referenced tokens do not grant rights as referred to in paragraph 1 to all the holders of asset-referenced tokens , the detailed policies and procedures shall specify the natural or legal persons that are provided with such rights. the detailed policies and procedures shall also specify the conditions for exercising such rights and the obligations imposed on those persons. ### deleted


### 4. issuers of asset-referenced tokens that do not grant rights as referred to in paragraph 1 to all the holders of such asset-referenced tokens shall put in place mechanisms to ensure the liquidity of the asset-referenced tokens. for that purpose , they shall establish and maintain written agreements with crypto-asset service providers authorised for the crypto-asset service referred to in article 3(1) point (12). the issuer of asset-referenced tokens shall ensure that a sufficient number of crypto-asset service providers are required to post firm quotes at competitive prices on a regular and predictable basis. ### deleted


### where the market value of asset-referenced tokens varies significantly from the value of the reference assets or the reserve assets , the holders of asset-referenced tokens shall have the right to redeem the crypto-assets from the issuer of crypto-assets directly. in that case , any fee applied for such redemption shall be proportionate and commensurate with the actual costs incurred by the issuer of asset-referenced tokens. ### deleted


### 1. any natural or legal person or such persons acting in concert (the ‘proposed acquirer’) , who intends to acquire , directly or indirectly , a qualifying holding in an issuer of asset-referenced tokens or to further increase , directly or indirectly , such a qualifying holding so that the proportion of the voting rights or of the capital held would reach or exceed 10 % , 20 % , 30 % or 50 % , or so that the issuer of asset-referenced tokens would become its subsidiary (the ‘proposed acquisition’) , shall notify the competent authority of that issuer thereof in writing , indicating the size of the intended holding and the information required by the regulatory technical standards adopted by the commission in accordance with article 38(4). ### 1. any natural or legal person or such persons acting in concert (the ‘proposed acquirer’) , who intends to acquire , directly or indirectly , a qualifying holding in an issuer of asset-referenced tokens or to further increase , directly or indirectly , such a qualifying holding so that the proportion of the voting rights or of the capital held would reach or exceed 20 % , 30 % or 50 % , or so that the issuer of asset-referenced tokens would become its subsidiary (the ‘proposed acquisition’) , shall notify the competent authority of that issuer thereof in writing , indicating the size of the intended holding and the information required by the regulatory technical standards adopted by the commission in accordance with article 38(4).


### 2. any natural or legal person who has taken a decision to dispose , directly or indirectly , of a qualifying holding in an issuer of asset-referenced tokens (the ‘proposed vendor’) shall first notify the competent authority in writing thereof , indicating the size of such holding. such a person shall likewise notify the competent authority where it has taken a decision to reduce a qualifying holding so that the proportion of the voting rights or of the capital held would fall below 10 % , 20 % , 30 % or 50 % or so that the issuer of asset-referenced tokens would cease to be that person’s subsidiary. ### 2. any natural or legal person who has taken a decision to dispose , directly or indirectly , of a qualifying holding in an issuer of asset-referenced tokens (the ‘proposed vendor’) shall first notify the competent authority in writing thereof , indicating the size of such holding. such a person shall likewise notify the competent authority where it has taken a decision to reduce a qualifying holding so that the proportion of the voting rights or of the capital held would fall below 20% , 30% or 50% or so that the issuer of asset-referenced tokens would cease to be that person’s subsidiary.


### 1. by derogation of article 11 of directive 2009/110/ec , only the following requirements regarding the issuance and redeemability of e-money tokens shall apply to issuers of e-money tokens. ### 1. by derogation of article 11 of directive2009/110/ec , the following requirements regarding the issuance and redeemability of e-money tokens shall apply to issuers of e-money tokens.


### 2. holders of e-money tokens shall be provided with a claim on the issuer of such e-money tokens. any e-money token that does not provide all holders with a claim shall be prohibited. ### 2. holders of e-money tokens are entitled to claim redemption at any moment and at par value , of the monetary value of thee-money tokens held , either in cash or by credit transfer.


### 4. upon request by the holder of e-money tokens , the respective issuer must redeem , at any moment and at par value , the monetary value of the e-money tokens held to the holders of e-money tokens , either in cash or by credit transfer. ### deleted


### 5. issuers of e-money tokens shall prominently state the conditions of redemption , including any fees relating thereto , in the crypto-asset white paper as referred to in article 46. ### 5. issuers of e-money tokens shall prominently state the conditions of redemption , including any fees relating thereto , in the crypto-asset white paper as referred to in article 46. in any event , redemption shall be immediate or within no more than two working days.


### 5. issuers of e-money tokens shall prominently state the conditions of redemption , including any fees relating thereto , in the crypto-asset white paper as referred to in article 46. ### 5. redemption may not be subject to a fee. issuers of e-money tokens shall prominently state the conditions of redemption in the crypto-asset white paper as referred to in article 46.


### 6. redemption may be subject to a fee only if stated in the crypto-asset white paper. any such fee shall be proportionate and commensurate with the actual costs incurred by issuers of e-money tokens. ### deleted


### 6. redemption may be subject to a fee only if stated in the crypto-asset white paper. any such fee shall be proportionate and commensurate with the actual costs incurred by issuers of e-money tokens. ### 6. redemption may be subject to a fee only if stated in the crypto-asset white paper and only in any of the following cases:


### 7. where issuers of e-money tokens does not fulfil legitimate redemption requests from holders of e-money tokens within the time period specified in the crypto-asset white paper and which shall not exceed 30 days , the obligation set out in paragraph 3 applies to any following third party entities that has been in contractual arrangements with issuers of e-money tokens: ### 7. where the issuer of an e-money token does not fulfil legitimate redemption requests from holders of e-money tokens within 30days , the holder is entitled to claim redemption of funds to any following third party entities that has been in contractual arrangements with issuers of e-money tokens:


### 1. crypto-asset services shall only be provided by legal persons that have a registered office in a member state of the union and that have been authorised as crypto-asset service providers in accordance with article 55 ### 1. crypto-asset services shall only be provided by legal persons that have a registered office in a member state of the union and that have an authorisation which allows them to provide those services in accordance with article 53a.


### 1. crypto-asset services shall only be provided by legal persons that have a registered office in a member state of the union and that have been authorised as crypto-asset service providers in accordance with article 55 ### 1. crypto-asset services shall only be provided by legal persons that have a registered office in a member state of the union and that have been authorised as crypto-asset service providers in accordance with article 55.the esma shall require significant crypto-asset service providers who intend to provide crypto-asset services , to obtain authorisation before commencing the provision of crypto-asset services. esma shall ensure the supervision of the significant casp in close cooperation with the competent authority of the home member state. esma shall develop draft regulatory technical standards to determine the criteria to be taken account when assessing the significance of a casp.


### proof that the natural persons involved in the management body of the applicant crypto-asset service provider collectively possess sufficient knowledge , skills and experience to manage that provider and that those natural persons are required to commit sufficient time to the performance of their duties; ### proof that the natural persons involved in the management body of the applicant crypto-asset service provider are of good repute and possess appropriate knowledge and experience to manage that provider;


### a description of the procedure and system to detect market abuse. ### where the applicant crypto-asset service provider intends to operate a trading platform for crypto-assets , a description of the procedure and system to detect market abuse.


### where the applicant crypto-asset service provider intends to exchange crypto-assets for fiat currency or crypto-assets for other crypto-assets , a description of the non-discriminatory commercial policy; ### where the applicant crypto-asset service provider intends to exchange crypto-assets for fiat currency or crypto-assets for other crypto-assets , a description of the non-discriminatory commercial policy governing the relationship with clients , including a description of the methodology for determining the price of the crypto-assets they propose for exchange against funds or other crypto-assets;


### the management body of the applicant crypto-asset service provider poses a threat to its effective , sound and prudent management and business continuity , and to the adequate consideration of the interest of its clients and the integrity of the market; ### the management body of the applicant crypto-asset service provider poses a threat to its effective , sound and prudent management and business continuity , and to the adequate consideration of the interest of its clients and the integrity of the market;


### 6. competent authorities shall inform esma of all authorisations granted under this article. esma shall add all the information submitted in successful applications to the register of authorised crypto-asset service providers provided for in article57. esma may request information in order to ensure that competent authorities grant authorisations under this article in a consistent manner. ### 6. competent authorities shall inform esma of all authorisations granted under this article. esma shall add all the information submitted in successful applications to the register of authorised crypto-asset service providers in accordance with inarticle57.


### 4. the insurance policy referred to in paragraph 2 shall have at least all of the following characteristics: ### 4. the insurance policy referred to in paragraph 2 shall be disclosed to the public through the crypto-asset service provider’s website and shall have at least all of the following characteristics:


### 7. crypto-asset service providers shall have internal control mechanisms and effective procedures for risk assessment , including effective control and safeguard arrangements for managing ict systems in accordance with regulation (eu) 2021/xx of the european parliament and of the council.65 they shall monitor and , on a regular basis , evaluate the adequacy and effectiveness of internal control mechanisms and procedures for risk assessment and take appropriate measures to address any deficiencies. ### 7. crypto-asset service providers shall have mechanisms , systems and effective procedures in accordance with regulation (eu) 2021/xx of the european parliament and of the council as well as effective procedures for risk assessment to comply with the obligations in relation to money laundering and terrorist financing under directive (eu) 2015/849 of the european parliament and of the council. they shall monitor and , on a regular basis , evaluate the adequacy and effectiveness of internal control mechanisms and procedures for risk assessment and take appropriate measures to address any deficiencies.


### 1. crypto-asset service providers that hold crypto-assets belonging to clients or the means of access to such crypto-assets shall make adequate arrangements to safeguard the ownership rights of clients , especially in the event of the crypto-asset service provider’s insolvency , and to prevent the use of a client’s crypto-assets on own account except with the client’s express consent. ### 1. crypto-asset service providers that hold crypto-assets belonging to clients or the means of access to such crypto-assets shall make adequate arrangements to safeguard the ownership rights of clients , especially in the event of the crypto-asset service provider’s insolvency , and to prevent the use of a client’s crypto-assets for their own account.


### 2. where their business models or the crypto-asset services require holding clients’ funds , crypto-asset service providers shall have adequate arrangements in place to safeguard the rights of clients and prevent the use of clients’ funds , as defined under article 4(25) of directive (eu) 2015/236667 , for their own account. ### 2. where their business models or the crypto-asset services require holding clients’ funds other than e-money tokens , crypto-asset service providers shall have adequate arrangements in place to safeguard the rights of clients and prevent the use of clients’ funds for their own account.


### 3. crypto-asset service providers shall , promptly place any client’s funds , with a central bank or a credit institution. ### 3. crypto-asset service providers shall , by the end of the business day following the day the funds other than e-money tokens have been received , place such client’s funds , with a central bank , where available , or a credit institution. crypto-asset service providers shall take all necessary steps to ensure that the clients’ funds other than e-money tokens held with a central bank or a credit institution are held in an account or accounts separately identifiable from any accounts used to hold funds belonging to the crypto-asset service provider.


### 2. crypto-asset service providers that are authorised for the custody and administration of crypto-assets on behalf of third parties shall keep a register of positions , opened in the name of each client , corresponding to each client’s rights to the crypto-assets. crypto-asset service providers shall record as soon as possible , in that register any movements following instructions from their clients. their internal procedures shall ensure that any movement affecting the registration of the crypto-assets is evidenced by a transaction regularly registered in the client’s position register. ### 2. crypto-asset service providers that are authorised for the custody and administration of crypto-assets on behalf of third parties shall do its utmost to facilitate the exercise of the rights attached to the crypto-assets. they shall keep a register of positions , opened in the name of each client , corresponding to each client’s rights to the crypto-assets. crypto-asset service providers shall record as soon as possible , in that register any movements following instructions from their clients. their internal procedures shall ensure that any movement affecting the registration of the crypto-assets is evidenced by a transaction regularly registered in the client’s position register. the organisational choice relating to the service of custody such as the use of a multi-signature solution , is the responsibility of the custodian of crypto-assets. as a result , the fact that the movements on the customer's account are secured by the use of the multi-signature process is not such as to call into question the qualification of the custody service.


### those rules and procedures shall ensure that the crypto-asset service provider cannot lose clients’ crypto-assets or the rights related to those assets due to frauds , cyber threats or negligence. ### those rules and procedures shall ensure that the crypto-asset service provider cannot lose clients’ crypto-assets or the rights related to those assets or the means of access to the crypto-assets due to frauds , cyber threats or negligence.


### 6. crypto-asset service providers that are authorised for the custody and administration of crypto-assets on behalf of third parties shall ensure that crypto-assets held on behalf of their clients or the means of access to those crypto-assets are returned as soon as possible to those clients. ### 6. crypto-asset service providers that are authorised for the custody and administration of crypto-assets on behalf of third parties shall ensure that necessary procedures are in place to return crypto-assets held on behalf of their clients or the means of access as soon as possible to those clients. when it is impossible to return the crypto-asset or the control over the means of access of those crypto-assets and except in the case of events not directly or indirectly attributable to the crypto-assets services provider , the crypto-assets custodian shall compensate its client.


### 7. crypto-asset service providers that are authorised for the custody and administration of crypto-assets on behalf of third parties shall segregate holdings on behalf of their clients from their own holdings. they shall ensure that , on the dlt , their clients’ crypto-assets are held on separate addresses from those on which their own crypto-assets are held. ### 7. crypto-asset service providers that are authorised for the custody and administration of crypto-assets on behalf of third parties shall segregate holdings of crypto-assets on behalf of their clients from their own holdings and ensure that the means of access to crypto assets from their clients are clearly identified as such. they shall ensure that , on the dlt , their clients’ crypto-assets are held on separate addresses from those on which their own crypto-assets are held.


### 8. crypto-asset service providers that are authorised for the custody and administration of crypto-assets on behalf of third parties shall be liable to their clients for loss of crypto-assets as a resulting from a malfunction or hacks up to the market value of the crypto-assets lost. ### 8. crypto-asset service providers that are authorised for the custody and administration of crypto-assets on behalf of third parties shall be held liable to their clients for the loss of crypto-assets or of the means of access to the crypto-assets as a result from malfunction or hacks that are attributed to the provision of the relevant service and the operation of the service provider. the liability of the crypto-asset service provider shall be up to the market value of the crypto-asset lost.


### 8. crypto-asset service providers that are authorised for the operation of a trading platform for crypto-assets shall complete the final settlement of a crypto-asset transaction on the dlt on the same date as the transactions has been executed on the trading platform. ### 8. crypto-asset service providers that are authorised for the operation of a trading platform for crypto-assets shall complete the final settlement of a crypto-asset transaction on the dlt , in the case of crypto-asset deposit or withdrawal activities only , on the same date as the transactions has been executed on the trading platform or , in the case of transactions settled outside the dlt , on the closing day of the various related transactions.


### 1. crypto-asset service providers that are authorised to execute orders for crypto-assets on behalf of third parties shall take all necessary steps to obtain , when executing orders , the best possible result for their clients taking into account the best execution factors of price , costs , speed , likelihood of execution and settlement , size , nature or any other consideration relevant to the execution of the order , unless the crypto-asset service provider concerned executes orders for crypto-assets following specific instructions given by its clients. ### 1. crypto-asset service providers that are authorised to execute orders for crypto-assets on behalf of third parties shall take all necessary steps to obtain , when executing orders , the best possible result for their clients taking into account the best execution factors of price , costs , speed , likelihood of execution and settlement , size , nature or any other consideration relevant to the execution of the order , unless the crypto-asset service provider concerned executes orders for crypto-assets following specific instructions given by its clients. where a crypto-asset service provider executes an order on behalf of a retail client , the best possible result shall be determined in terms of the total consideration , representing the price of the crypto-assets and the costs relating to execution , which shall include all expenses incurred by the client which are directly relating to the execution of the order , including execution venue fees , clearing and settlement fees and any other fees paid to third parties involved in the execution of the order.


### 1. crypto-asset service providers that are authorised to provide advice on crypto-assets shall assess the compatibility of such crypto-assets with the needs of the clients and recommend them only when this is in the interest of the clients. ### 1. crypto-asset service providers that are authorised to provide advice on crypto-assets shall assess the compatibility of such crypto-assets with the requirements and preferences of the client or potential client and recommend them only when they are suitable for the client or potential client and , in particular , are in accordance with his or her risk tolerance and ability to bear losses.


### 3. for the purposes of the assessment referred to in paragraph 1 , crypto-asset service providers that are authorised to provide advice on crypto-assets shall request information about the client or prospective client’s knowledge of , and experience in crypto-assets , objectives , financial situation including the ability to bear losses and a basic understanding of risks involved in purchasing crypto-assets. ### 3. for the purposes of the assessment referred to in paragraph 1 , crypto-asset service providers that are authorised to provide advice on crypto-assets shall request information about the client or potential client’s knowledge of , and experience in crypto-assets , the clients' objectives , financial situation including risk tolerance , financial situation including the ability to bear losses , and basic understanding of risks involved in purchasing crypto-assets. crypto-asset service providers that are authorised to provide advice on crypto-assets shall warn clients that , due to their nature ,


### 1. any natural or legal person or such persons acting in concert (the ‘proposed acquirer’) , who have taken a decision either to acquire , directly or indirectly , a qualifying holding in a crypto-asset service provider or to further increase , directly or indirectly , such a qualifying holding in a crypto-asset service provider so that the proportion of the voting rights or of the capital held would reach or exceed 10 % , 20 % , 30 % or 50 % or so that the crypto-asset service provider would become its subsidiary (the ‘proposed acquisition’) , shall notify the competent authority of that crypto-asset service provider thereof in writing indicating the size of the intended holding and the information required by the regulatory technical standards adopted by the commission in accordance with article 75(4). ### 1. any natural or legal person or such persons acting in concert (the ‘proposed acquirer’) , who have taken a decision either to acquire , directly or indirectly , a qualifying holding in a crypto-asset service provider or to further increase , directly or indirectly , such a qualifying holding in a crypto-asset service provider so that the proportion of the voting rights or of the capital held would reach or exceed 20 % , 30 % or 50 % or so that the crypto-asset service provider would become its subsidiary (the ‘proposed acquisition’) , shall notify the competent authority of that crypto-asset service provider thereof in writing indicating the size of the intended holding and the information required by the regulatory technical standards adopted by the commission in accordance with article 75(4).


### 2. any natural or legal person who has taken a decision to dispose , directly or indirectly , of a qualifying holding in a crypto-asset service provider (the ‘proposed vendor’) shall first notify the competent authority in writing thereof , indicating the size of such holding. such a person shall likewise notify the competent authority where it has taken a decision to reduce a qualifying holding so that the proportion of the voting rights or of the capital held would fall below 10% , 20% , 30% or 50% or so that the crypto-asset service provider would cease to be that person’s subsidiary. ### 2. any natural or legal person who has taken a decision to dispose , directly or indirectly , of a qualifying holding in a crypto-asset service provider (the ‘proposed vendor’) shall first notify the competent authority in writing thereof , indicating the size of such holding. such a person shall likewise notify the competent authority where it has taken a decision to reduce a qualifying holding so that the proportion of the voting rights or of the capital held would fall below 20% , 30% or 50% or so that the crypto-asset service provider would cease to be that person’s subsidiary.


### 1. issuers of crypto-assets shall inform the public as soon as possible of inside information which concerns them , in a manner that enables the public to access that information in an easy manner and to assess that information in a complete , correct and timely manner. ### 1. issuers and offerors of crypto-assets shall inform the public as soon as possible of inside information which concerns them , in a manner that enables the public to access that information in an easy manner and to assess that information in a complete , correct and timely manner.


### 2. issuers of crypto-assets may , on their own responsibility , delay disclosure to the public of inside information provided that all of the following conditions are met: ### 2. issuers and offerors of crypto-assets may , on their own responsibility , delay disclosure to the public of inside information provided that all of the following conditions are met:


### immediate disclosure is likely to prejudice the legitimate interests of the issuers; ### immediate disclosure is likely to prejudice the legitimate interests of the issuers or the offerors , as applicable;


### the issuers are able to ensure the confidentiality of that information. ### the issuers or the offerors , as applicable , are able to ensure the confidentiality of that information.


### to require crypto-asset service providers and the natural or legal persons that control them or are controlled by them , to provide information and documents; ### to require crypto-asset service providers and the natural or legal persons that control them or are controlled by them , to provide information and documents; where there are reasonable grounds for believing that the information and documents provided are not in line with this regulation , the competent authority may require crypto-asset service providers and the natural or legal persons who control them , or who are controlled by them , to amend the information and documents or to produce new ones , within one month of the request;


### to require members of the management body of the crypto-asset service providers to provide information; ### to require members of the management body of the crypto-asset service providers to provide information; where there are reasonable grounds for believing that the information provided is not in line with this regulation , the competent authority may require the members of the management body of the crypto-asset service providers to amend the information and documents or to produce new ones , within one month of the request;


### 1. by … [36 months after the date of entry into force of this regulation] after consulting the eba and esma , the commission shall present a report to the european parliament and the council on the application of this regulation , where appropriate accompanied by a legislative proposal. ### 1. by … [18 months after the date of entry into force of this regulation] after consulting the eba and esma , the commission shall present a report to the european parliament and the council on the application of this regulation , where appropriate accompanied by a legislative proposal.


### 1. articles 4 to 14 shall not apply to crypto-assets , other than asset-referenced tokens and e-money tokens , which were offered to the public in the union or admitted to trading on a trading platform for crypto-assets before [please insert date of entry into application]. ### 1. by way of derogation from this regulation and for a temporary period of six months from the entry into force of this regulation , articles 4 to 14 shall not apply to crypto-assets , other than asset-referenced tokens and e-money tokens , which were publicly offered in the union or admitted to trading on a trading platform for crypto-assets in the case of crypto-assets not subject to articles 4 to 14.


### 1. this regulation applies to persons that are engaged in the issuance of crypto-assets or provide services related to crypto-assets in the union. ### 1. this regulation applies to persons that are engaged:


### (1) ‘distributed ledger technology’ or ‘dlt’ means a type of technology that support the distributed recording of encrypted data; ### (1) ‘distributed ledger technology’ or ‘dlt’ means protocols that enable members to agree a single source of truth through consensus mechanisms in a distributed network;


### (3) ‘asset-referenced token’ means a type of crypto-asset that purports to maintain a stable value by referring to the value of several fiat currencies that are legal tender , one or several commodities or one or several crypto-assets , or a combination of such assets; ### (3) ‘asset-referenced token’ means a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referring to any other value or right or combination thereof , including one or several official currencies of a country;


### (3) ‘asset-referenced token’ means a type of crypto-asset that purports to maintain a stable value by referring to the value of several fiat currencies that are legal tender , one or several commodities or one or several crypto-assets , or a combination of such assets; ### (3) ‘asset-referenced token’ means a type of crypto-asset that purports to maintain a stable value by referring to the value of several official currencies , one or several commodities or one or several crypto-assets , or a combination of such assets;


### (4) ‘electronic money token’ or ‘e-money token’ means a type of crypto-asset the main purpose of which is to be used as a means of exchange and that purports to maintain a stable value by referring to the value of a fiat currency that is legal tender; ### (4) electronic money token’ or ‘e-money token’ means a type of crypto-asset the main purpose of which is to be used as a means of payment and that purports to maintain a stable value by referring to the value of a fiat currency that is legal tender and that otherwise fulfils the characteristics of ‘electronic money’ as defined in article 2 (2) of directive 2009/110/ec;


### (4) ‘electronic money token’ or ‘e-money token’ means a type of crypto-asset the main purpose of which is to be used as a means of exchange and that purports to maintain a stable value by referring to the value of a fiat currency that is legal tender; ### (4) ‘electronic money token’ or ‘e-money token’ means a type of crypto-asset the main purpose of which is to be used as a means of exchange and that purports to maintain a stable value by referring to the value of an official currency;


### (5) ‘utility token’ means a type of crypto-asset which is intended to provide digital access to a good or service , available on dlt , and is only accepted by the issuer of that token; ### (5) utility token’ means a type of crypto-asset which is accepted only by the issuer and is intended to provide digital access to a good or service , available on dlt , provided only by the issuer of that token;


### (6) ‘issuer of crypto-assets’ means a legal person who offers to the public any type of crypto-assets or seeks the admission of such crypto-assets to a trading platform for crypto-assets; ### (6) ‘issuer of crypto-assets’ means the identifiable natural or legal person who creates the crypto-assets;


### (7) ‘offer to the public’ means an offer to third parties to acquire a crypto-asset in exchange for fiat currency or other crypto-assets; ### (7) offer to the public’ means a communication to persons in any form and by any means , presenting sufficient information on the terms of the offer and the crypto-assets to be offered , so as to enable potential holder/client to decide to purchase those crypto-assets. this definition also applies to the placing of crypto-assets through crypto-assets services providers;


### (7) ‘offer to the public’ means an offer to third parties to acquire a crypto-asset in exchange for fiat currency or other crypto-assets; ### (7) ‘offer to the public’ means an offer made on a professional basis to third parties to acquire a crypto-asset in exchange for fiat currency or other crypto-assets;


### (8) ‘crypto-asset service provider’ means any person whose occupation or business is the provision of one or more crypto-asset services to third parties on a professional basis; ### (8) ‘crypto-asset service provider’ means any person who has been authorised to provide one or more crypto-asset services to third parties on a professional basis in accordance with art.53;


### (21) ‘reserve assets’ means the basket of fiat currencies that are legal tender , commodities or crypto-assets , backing the value of an asset-referenced tokens , or the investment of such assets; ### (21) ‘reserve assets’ means the basket of official national currencies , commodities or crypto-assets , backing the value of an asset-referenced tokens , or the investment of such assets;


### 2. the commission is empowered to adopt delegated acts in accordance with article 121 to specify technical elements of the definitions laid down in paragraph 1 , and to adjust those definitions to market developments and technological developments. ### deleted


### the crypto-assets are automatically created through mining as a reward for the maintenance of the dlt or the validation of transactions; ### deleted


### the crypto-assets are unique and not fungible with other crypto-assets; ### the crypto-assets are unique and not fungible with other crypto-assets; are not fractionable and transferable directly to other holders without the issuer’s permission , are accepted only by the issuer , including merchant’s loyalty schemes , represent ip rights , guarantees , certificate authenticity of a unique physical asset , or any other right not linked to the ones that financial instruments bear , and are not accepted to trading at a crypto-asset exchange;


### over a period of 12 months , the total consideration of an offer to the public of crypto-assets in the union does not exceed eur 1 000 000 , or the equivalent amount in another currency or in crypto-assets; ### over a period of 12 months , the total consideration of an offer to the public of crypto-assets in the union does not exceed eur 8 000 000 , or the equivalent amount in another currency or in crypto-assets;


### 3. where the offer to the public of crypto-assets , other than asset-referenced tokens or e-money tokens , concerns utility tokens for a service that is not yet in operation , the duration of the public offer as described in the crypto-asset white paper shall not exceed 12 months. ### 3. the duration of the public offer as described in the crypto-asset white paper shall not exceed 12 months.


### a detailed description of the rights and obligations attached to the crypto-assets and the procedures and conditions for exercising those rights; ### a detailed description on the planned amount of the issue , in particular the minimum amount allowing the project to be carried out (‘soft cap’) , the target amount , and the maximum amount that will automatically close the subscriptions when reached (‘hard cap’);


### information on the underlying technology and standards applied by the issuer of the crypto-assets allowing for the holding , storing and transfer of those crypto-assets; ### information on the effective arrangements in place to monitor and safeguard the funds , or other crypto-assets , raised during such offer;


### 9. the crypto-asset white paper shall be drawn up in at least one of the official languages of the home member state or in a language customary in the sphere of international finance. ### 9. the crypto-asset white paper shall be drawn up in at least one of the official languages of the home member state or in english.


### 1. competent authorities shall not require an ex ante approval of a crypto-asset white paper , nor of any marketing communications relating to it before their publication. ### 1. esma shall not require an ex ante approval of a crypto-asset white paper , nor of any marketing communications relating to it before their publication.


### 1. competent authorities shall not require an ex ante approval of a crypto-asset white paper , nor of any marketing communications relating to it before their publication. ### 1. competent authorities shall not require an ex ante approval of a crypto-asset white paper , nor of any marketing communications relating to it before their publication. it shall , however , be possible for issuers of crypto-assets , other than asset-referenced tokens or e-money tokens , to ask the competent authority for ex-ante approval of a white paper. the approval of the crypto-asset white paper shall be valid throughout the union.


### 2. issuers of crypto-assets , other than asset-referenced tokens or e-money tokens , shall notify their crypto-asset white paper , and , in case of marketing communications as referred to in article 6 , such marketing communications , to the competent authority of their home member state at least 20 working days before publication of the crypto-asset white paper. that competent authority may exercise the powers laid down in article 82(1). ### 2. issuers of crypto-assets , other than asset-referenced tokens or e-money tokens , shall notify their crypto-asset white paper , and , in case of marketing communications as referred to in article 6 , such marketing communications , to the esma at least 20 working days before publication of the crypto-asset white paper. esma may exercise the powers laid down in article 82(1).


### 5. the eba shall , in close cooperation with esma , develop draft implementing technical standards to establish standard forms , templates and procedures for the application for authorisation. ### 5. the eba shall , in close cooperation with esma , develop draft implementing technical standards to establish standard forms , templates and procedures for the application for authorisation , including the standard requirements to be met by the legal opinion referred to in point (d) of paragraph 2 ,in order to ensure uniformity across the union.


### detailed information on the nature and enforceability of rights , including any direct redemption right or any claims , that holders of asset-referenced tokens and any legal or natural person as referred in article 35(3) , may have on the reserve assets or against the issuer , including how such rights may be treated in insolvency procedures. ### detailed information on the nature and enforceability of the rights of holders , including


### where the issuer does not offer a direct right on the reserve assets , detailed information on the mechanisms referred to in article 35(4) to ensure the liquidity of the asset-referenced tokens; ### detailed information on the stabilisation mechanisms referred to in article 35(4) , including , where applicable , any proposed arrangements to ensure the liquidity of the asset-referenced tokens;


### for the purposes of point (e) , where no direct claim or redemption right has been granted to all the holders of asset-referenced tokens , the crypto-asset white paper shall contain a clear and unambiguous statement that all the holders of the crypto-assets do not have a claim on the reserve assets , or cannot redeem those reserve assets with the issuer at any time. ### deleted


### 4. the eba , esma , the ecb and , where applicable , a central bank as referred to in paragraph 3 shall , within 2 months after having received the draft decision and the application file , issue a non-binding opinion on the application and transmit their non-binding opinions to the competent authority concerned. that competent authority shall duly consider those non-binding opinions and the observations and comments of the applicant issuer. ### 4. the eba , esma , the ecb and , where applicable , a central bank as referred to in paragraph 3 shall , within 2 months of receiving the draft decision and the application file , issue an opinion on the application and transmit their opinions to the competent authority concerned. opinions should be non-binding with the exception of those of the ecb and the member states’ central banks on monetary policy and financial stability issues. the competent authority shall duly consider those opinions and the observations and comments of the applicant issuer.


### 4. the eba , esma , the ecb and , where applicable , a central bank as referred to in paragraph 3 shall , within 2 months after having received the draft decision and the application file , issue a non-binding opinion on the application and transmit their non-binding opinions to the competent authority concerned. that competent authority shall duly consider those non-binding opinions and the observations and comments of the applicant issuer. ### 4. the eba , esma , the ecb and , where applicable , a central bank as referred to in paragraph 3 shall , within 2 months after having received the draft decision and the application file , issue an opinion on the application and transmit their non-binding opinions to the competent authority concerned. opinions shall be non-binding with the exception of those of the ecb and the member states’ central banks on the application of monetary policy and ensuring the secure handling of payments. that competent authority shall duly consider those non-binding opinions and the observations and comments of the applicant issuer. if the ecb or , where applicable , a central bank referred to in paragraph 3 , issues a negative opinion due to monetary policy or payment considerations , the competent authority must refuse the application for authorisation and inform the applicant issuer of the decision.


### 1. competent authorities shall , within one month after having received the non-binding opinion referred to in article 18(4) , take a fully reasoned decision granting or refusing authorisation to the applicant issuer and , and , within 5 working days , notify that decision to applicant issuers. where an applicant issuer is authorised , its crypto-asset white paper shall be deemed to be approved. ### 1. competent authorities shall , within one month of receiving the opinion referred to in article 18(4) , take a fully reasoned decision granting or refusing authorisation to the applicant issuer and , within 5 working days , notify that decision to applicant issuers. where an applicant issuer is authorised , its crypto-asset white paper shall be deemed to be approved.


### – having regard to the commission’s spring 2021 european economic forecast of 12 may 2021 , ### – having regard to the commission’s summer 2021 european economic forecast of 7 july 2021 ,


### a. whereas the european semester plays an essential role in coordinating economic and budgetary policies in the member states; ### deleted


### c. whereas according to the commission spring 2021 economic forecast , the drop in economic activity has been less than previously expected , thanks to the emergency support measures designed to provide liquidity to businesses and protect the income and jobs of eu citizens; ### c. whereas according to the commission summer 2021 economic forecast , the drop in economic activity has been less than previously expected , allegedly partly due to the emergency support measures designed to provide liquidity to businesses and protect the income and jobs of eu citizens;


### g. whereas the ratio of public debt to gdp in the eu is forecast at 94 % this year , while the euro area debt-to-gdp ratio is forecast to follow the same trend , rising to 102 % this year; ### g. whereas the ratio of public debt to gdp in the eu is forecast at 94 % this year , while the euro area debt-to-gdp ratio is forecast to follow the same trend , rising to 102 % this year; whereas 7 member states are expected to have debt-to-gdp ratios well in excess of 100 % in this year , with one member states even going well over 200 %;


### g. whereas the ratio of public debt to gdp in the eu is forecast at 94 % this year , while the euro area debt-to-gdp ratio is forecast to follow the same trend , rising to 102 % this year; ### g. whereas the ratio of public debt to gdp in the eu is forecast at 94 % this year , while the euro area debt-to-gdp ratio is forecast to follow the same trend , rising to an alarming 102 % this year;


### h. whereas reference values of up to 3 % of planned or actual government deficit and 60 % of debt to gdp are defined by the tfeu; ### h. whereas reference values of up to 3 % of planned or actual government deficit and 60 % of debt to gdp are defined by the tfeu; whereas member states cannot be expected to enjoy the benefits of a stable , essentially northern currency , while at the same time applying southern budgetary and fiscal policies; whereas this has thus far led to a latinisation of the euro , rather than sound and responsible budgetary and fiscal policies across the member states;


### 1. notes that the european economy is recovering from the devastating impact of the global pandemic; remains concerned about low growth potential compared to other regions in the post-pandemic recovery; ### 1. notes that gdp is increasing again from the devastating impact of the global pandemic; underlines that gdp growth is not necessarily a good indicator to assess the resilience and recovery of an economy; remains concerned about low growth potential compared to non-eu and non-euro area regions in the post-pandemic recovery;


### 3. points out that the roll-out of the recovery and resilience facility (rrf) will help to make eu economies and societies more sustainable , inclusive , resilient and better prepared for the green and digital transitions; notes that the facility , which is the centrepiece of nextgenerationeu , will provide large-scale financial support to member states of up to eur 672.5 billion in grants and loans to finance reforms and investments; ### 3. points out that the roll-out of the recovery and resilience facility (rrf) intends to help to make eu economies and societies more sustainable , inclusive , resilient and better prepared for the green and digital transitions; notes that the facility , which is the centrepiece of the illegally eu debt-funded nextgenerationeu , will provide large-scale financial support to member states of up to eur 672.5 billion in grants and loans to finance reforms and investments , while at the same time binding member states and future generations to pay back the loans and bear the interest due on the eu-issued bonds;


### 5. notes that the general escape clause of the stability and growth pact will continue to be applied in 2022 and is expected to be deactivated as of 2023; notes , furthermore , that the decision to deactivate the general escape clause should be taken as an overall assessment of the state of the economy based on quantitative criteria , with the level of economic activity in the eu compared to pre-crisis levels as the key quantitative criterion; points out that country-specific situations will continue to be taken into account after the deactivation of the general escape clause; ### 5. notes that the general escape clause of the stability and growth pact will continue to be applied in 2022 and is expected to be deactivated as of 2023; notes , furthermore , that the decision to deactivate the general escape clause should be taken as an overall assessment of the state of the economy based on quantitative criteria , with the level of economic activity in the eu compared to pre-crisis levels as the key quantitative criterion; points out that before the deactivation of the general escape clause , the causes of the economic imbalances between member states should be analysed in order to review the stability and growth pact , better support growth and restore an adequate level of public investment;


### 6. is concerned that according to the baseline scenario of the commission’s latest debt sustainability monitor , the debt ratio in the euro area is to peak at 104.6 % in 2024 and 2025 , while the debt ratio in the union is to peak at 96.5 % in 2024 , before declining once again; ### 6. notes that according to the baseline scenario of the commission’s latest debt sustainability monitor , the debt ratio in the euro area is to peak at 104.6 % in 2024 and 2025 , while the debt ratio in the union is to peak at 96.5 % in 2024 , before declining once again;


### 7. is convinced that coordination of national fiscal policies remains crucial in underpinning the recovery; notes that the overall fiscal stance , taking into account national budgets and the rrf , should remain supportive in 2021 and 2022; ### 7. is convinced that coordination of national fiscal policies should be overhauled to underpin the recovery more effectively; notes that the overall fiscal stance , taking into account national budgets and the rrf , should remain supportive in 2021 and 2022;


### 7. is convinced that coordination of national fiscal policies remains crucial in underpinning the recovery; notes that the overall fiscal stance , taking into account national budgets and the rrf , should remain supportive in 2021 and 2022; ### 7. is convinced that coordination of national fiscal policies remains crucial in underpinning the recovery;


### 8. highlights that fiscal policy should remain agile and adjust to the evolving situation as warranted , and that a premature withdrawal of fiscal support should be avoided; further highlights the expectation that economic activity will gradually normalise in the second half of 2021 and agrees that member states’ fiscal policies should become more differentiated in 2022 , duly taking into account the state of the recovery , fiscal sustainability and the need to reduce economic , social and territorial divergences; ### 8. notes that according to the commission the expectation that economic activity will gradually normalise in the second half of 2021 and agrees that member states’ fiscal policies should become more differentiated in 2022 , duly taking into account the state of the recovery , fiscal sustainability and the need to reduce economic , social and territorial divergences;


### 8. highlights that fiscal policy should remain agile and adjust to the evolving situation as warranted , and that a premature withdrawal of fiscal support should be avoided; further highlights the expectation that economic activity will gradually normalise in the second half of 2021 and agrees that member states’ fiscal policies should become more differentiated in 2022 , duly taking into account the state of the recovery , fiscal sustainability and the need to reduce economic , social and territorial divergences; ### 8. highlights that fiscal policy should remain agile and adjust to the evolving situation as warranted , and that a premature withdrawal of fiscal support should be avoided; further highlights the expectation that economic activity will gradually normalise in the second half of 2021 and agrees that member states’ fiscal policies should remain accommodative in 2022 and for as long as it takes to return to pre-crisis economic levels , duly taking into account the state of the recovery and the need to reduce economic , social and territorial divergences;


### 9. notes that member states with high debt should use the rrf to finance additional investment to support the recovery , while pursuing a prudent fiscal policy; stresses the importance of the member states using the potential of the rff to support the necessary structural changes and the transformation to more globally competitive , future-proof , agile industries; agrees that the growth of nationally financed current expenditure should be kept under control and be limited for member states with high debt , allowing fiscal measures to maximise support to the recovery without pre-empting future fiscal trajectories and creating a permanent burden on public finances; ### 9. notes that member states with high debt should use the rrf to finance additional investment to support the recovery by investing in transformative , high value-added sectors that create stable , quality employment , while pursuing a prudent fiscal policy; stresses the importance of the member states using the potential of the rff to support the necessary structural changes and the green and digital transformation to more globally competitive , future-proof , agile industries; agrees that the growth of nationally financed current expenditure should be kept under control and be flexible depending on the timing of the recovery and the initial conditions of each members state , allowing fiscal measures to maximise support to the recovery without pre-empting future fiscal trajectories and creating a permanent burden on public finances;


### 9. notes that member states with high debt should use the rrf to finance additional investment to support the recovery , while pursuing a prudent fiscal policy; stresses the importance of the member states using the potential of the rff to support the necessary structural changes and the transformation to more globally competitive , future-proof , agile industries; agrees that the growth of nationally financed current expenditure should be kept under control and be limited for member states with high debt , allowing fiscal measures to maximise support to the recovery without pre-empting future fiscal trajectories and creating a permanent burden on public finances; ### 9. notes that member states should use the rrf to finance additional investment to support the recovery; stresses the importance of the member states using the potential of the rff to support the necessary investments and the transformation to more globally competitive , future-proof , agile industries; agrees that the growth of nationally financed current expenditure should be primarily oriented towards gdp growth through productive investment , fiscal and bureaucratic simplification , to allow member states with high debt to maximise support to the recovery without pre-empting future fiscal trajectories and creating a permanent burden on public finances;


### 10. urges the commission to reassess the budgetary situation of the member states on the basis of the autumn 2021 economic forecast , before the council concludes its deliberations on the ongoing semester process; ### deleted


### 18. wishes that the commission had presented targeted and tailor made csrs for 2021 , instead of identical csrs for all member states , which could have focused on areas not covered by the scope of the rrf; ### deleted


### 19. recalls that member states , in their recovery and resilience plans , are required to effectively address all or a significant subset of challenges identified in the relevant csrs , including the fiscal aspects thereof , and that beyond the scope of the rrf , those recommendations that are not addressed remain valid and will continue to be monitored under the european semester framework; ### deleted


### 20. regrets the fact that the commission has not promoted fiscal csrs that promote medium-term fiscal sustainability , despite the fact that the activation of the general escape clause obliges member states not to endanger fiscal sustainability in the medium term; ### deleted


### 1. welcomes the entry of bulgaria and croatia into the banking union; ### 1. regrets the entry of bulgaria and croatia into the banking union; especially in the light of both countries' sharp drop in the corruption perception index 2020 , where bulgaria now takes last place , and increasing worries about corruption in croatia , such as the contested government order forcing banks to retroactively convert loans from swiss francs to euros and pay out over € 1.1 billion in reimbursement to customers it had lent money to , as well as ongoing corruption charges against the hdz party (epp) , the agrokor scandal involving finance minister maric , or the sanader case; calls on the eu not to expand the euro area with such corrupt regimes;


### 2. recalls that the banking union has delivered the institutional set-up for greater market integration , through the ssm and the srm , while a european deposit insurance scheme (edis) is still lacking; ### 2. whereas the banking union will further disintegrate due to moral hazard and lead to a permanent transfer union if mechanisms such as the backstop for the single resolution fund (srf) and a european deposit insurance scheme (edis) are implemented; regrets that insufficient progress in risk reduction in some member states serves as an argument for mutualisation of deposit insurance schemes , creating incentives for some member states not to reduce risk , or even engage in even more excessive risk-taking; points out that the absence of a proper impact assessment of the edis proposal is fundamentally at odds with the principles of sound governance;


### 3. considers that banks’ response to the current crisis demonstrates that the regulatory reforms in the past decade , as well as the institutional set-up , have resulted in better-capitalised and less-leveraged banks; ### 3. considers that banks’ response to the current crisis demonstrates that the regulatory reforms in the past decade , as well as the institutional set-up , have resulted in better-capitalised and less-leveraged banks , proving that equity and not debt is the solution to solve crises and build up resilience against economic and financial shocks;


### 4. considers that while the good relationship between the ssm and the srb has been fundamental from the inception of the system , a strengthened approach to cooperation between the two pillars is particularly important in the current context; ### deleted


### 5. underlines the vital contribution to addressing the crisis of public guarantee schemes , moratoria on loan repayments for borrowers in financial difficulty , the central banks’ liquidity programmes and the ecb’s targeted longer-term refinancing operations (tltro) and pandemic emergency purchase programme (pepp); ### 5. deplores the ecb's role in massively inflating the money supply and expanding its balance sheet up to over 70% of euro area gdp; recalls that banks in the northern euro area hold a disproportionately high amount of deposits with the ecb , and pay disproportionately high penalty interest to the ecb; by contrast , banks in the southern euro area benefit disproportionally from the negative interest rates on tltro loans;


### 5. underlines the vital contribution to addressing the crisis of public guarantee schemes , moratoria on loan repayments for borrowers in financial difficulty , the central banks’ liquidity programmes and the ecb’s targeted longer-term refinancing operations (tltro) and pandemic emergency purchase programme (pepp); ### 5. underlines the vital contribution to addressing the crisis of public guarantee schemes , moratoria on loan repayments for borrowers in financial difficulty , the central banks’ liquidity programmes and the ecb’s targeted longer-term refinancing operations (tltro) and pandemic emergency purchase programme (pepp); emphasises , therefore , that all the measures referred to above should remain in force for as long as necessary and should be withdrawn gradually;


### 6. notes the ‘quick fix’ to the capital requirements regulation31 extending transitional arrangements in order to support banks’ lending capacity32 ; ### 6. expresses concern about the the ‘quick fix’ to the capital requirements regulation31 extending transitional arrangements in order to support banks’ lending capacity32 ; seriously doubts whether supporting further debt-financing is a sustainable way to recapitalize the european economy and to fostering economic growth;


### a. whereas overall , the banking sector has responded to the covid-19 pandemic with resilience , mostly founded on the regulatory reforms enacted since the global financial crisis and further supported by extraordinary public policy relief measures and capital conservation practices; ### a. whereas the regulatory reforms enacted since the major global financial crisis have proved ineffective in combating the causes of the banking crises that have followed , and whereas many of the rules were immediately suspended in order to allow the banking system to prop up the economy during the covid-19 pandemic;


### a. whereas overall , the banking sector has responded to the covid-19 pandemic with resilience , mostly founded on the regulatory reforms enacted since the global financial crisis and further supported by extraordinary public policy relief measures and capital conservation practices; ### a. whereas overall , the banking sector has responded to the covid-19 pandemic with resilience , mostly founded on the regulatory reforms enacted since the global financial crisis and increased capital requirements , indicating that equity and solvency are key to tackle financial and economic shocks instead of ever-increasing debt financing;


### c. whereas the lack of a solution to the treatment of sovereign debt exposures and national options and discretions persists , undermining the european dimension of the banking union; ### deleted


### d. whereas climate change , environmental degradation and the transition to a low-carbon economy bring new risks to banks’ balance sheets; ### d. whereas climate change , environmental degradation , increased red tape in the context of climate reporting for financial institutions , which could be referred to as "green tape" , and the transition to a low-carbon economy bring new risks to banks’ balance sheets;


### e. whereas consumer protection varies across the banking union; ### e. whereas article 169 of the tfeu states that eu measures shall not prevent any member state from maintaining or introducing more stringent consumer protection measures provided that they are compatible with the treaties; in this way eu law provides a common basic level of protection to all consumers residing in the eu; recalls that there is no consistent and uniform definition of consumer protection in eu law , which justifies divergences amongst the member states;


### f. whereas prudential and anti-money laundering supervision is necessary; ### f. whereas there are still important loopholes in the eu aml framework , such as the explicit exemption of the non-profit sector from anti-money laundering reporting requirements , even though certain ngos and other non-financial entities (nfes) operate with larger amounts of money than numerous european banks;


### g. whereas the withdrawal of the uk from the eu has resulted in the relocation of banking services to the eu; ### g. whereas the withdrawal of the uk from the eu has resulted in the relocation of certain banking services to the eu;


### j. whereas depositors across the banking union should enjoy the same level of protection; ### j. whereas depositors across the banking union are exposed to varying levels of credit , market and operational risk , which justifies varying levels of protection;


### 18. regrets the fact that green bond issuance in the eu represents only 2.6 % of the eu’s total bond issuance; ### 18. regrets the fact that green bond issuance in the eu represents only 2.6 % of the eu’s total bond issuance , but welcomes the creation of an eu green bond standard as a way to increase the eu's dominance in this market; calls on the ecb to support the eu green bond standard by creating space for their purchase in its asset portfolio;


### (15) the objective of preventing tax evasion and avoidance could be ensured by requiring digital platform operators to report income earned through platforms at an early stage , before the national tax authorities carry out their yearly tax assessments. to facilitate the work of member states’ tax authorities , the reported information should be exchanged within one month following the reporting. in order to facilitate the automatic exchange of information and enhance the efficient use of resources , exchanges should be carried out electronically through the existing common communication network (‘ccn’) developed by the union. ### (15) the objective of preventing tax evasion and avoidance could be ensured by requiring digital platform operators to report income earned through platforms at an early stage , before the national tax authorities carry out their yearly tax assessments. to facilitate the work of member states’ tax authorities , the reported information should be exchanged within one month following the reporting. in order to facilitate the automatic exchange of information and enhance the efficient use of resources , exchanges should be carried out electronically through the existing common communication network (‘ccn’) developed by the union. so as to avoid additional bureaucratic burdens for smes , digital platform operators with annual revenues below eur 50 million globally and eur 10 million in the eu as a whole should be able to continue to provide information to national authorities by way of the means and tools already in use under member states’ legislation , at no additional cost.


### demonstrates that the use of a ‘securities account’ as defined under article 2(28) of regulation (eu) no 909/2014 or the use of book-entry form are incompatible with the use of its particular dlt; ### demonstrates that the use of a ‘securities account’ as defined under article 2(28) of regulation(eu) no 909/2014 or the use of book-entry form are incompatible with the use of the particular dlt deployed;


### proposes compensatory measures to meet the objectives pursued by the provisions from which an exemption is requested , and ensures at minimum that: ### proposes compensatory or corrective measures to meet the objectives pursued by the provisions from which an exemption is requested , and ensures at minimum that:


### 5. at its request , a csd operating a dlt securities settlement system may be exempted by the competent authority from the application of article 40 of regulation (eu) no 909/2014 on cash settlement , provided that the csd ensures delivery versus payment. ### 5. at its request , a csd operating a dlt sss may be exempted by the competent authority from the application of article 40 of regulation (eu) no 909/2014 on cash settlement , provided that the csd ensures delivery versus payment.


### the settlement of payments may be carried out through central bank money , where practicable and available , or where not practicable and available , through commercial bank money , including commercial bank money in a token-based form , or in e-money tokens. ### the settlement of the payment leg may be carried out through central bank money , where practicable and available , or where not practicable and available , through commercial bank money , including commercial bank money in a token-based form , or in e-money tokens.


### where settlement occurs through commercial bank money or e-money tokens , the investment firm or market operator operating the dlt mtf shall identify , measure , monitor , manage , and minimise any counterparty risk arising from the use of such money. ### where settlement occurs through commercial bank money or e-money tokens , the investment firm or market operator operating the dlt sss shall identify , measure , monitor , manage , and minimise any counterparty risk arising from the use of such money. where settlement occurs through e-money tokens for the payment leg , participants in a dlt sss may open accounts directly with the dlt sss for the purposes of settling the cash leg in e-money tokens , or alternatively the dlt sss and its participants may open an account with a third party providing services relating to e-money tokens. in those cases , the dlt sss or the third party shall be the issuer of e-money tokens and shall ensure that settlement of the payment leg takes place in e-money tokens. since e-monkey tokens can only be issued either by credit institutions or e-money institutions under the regulation no 2021/xx on markets in crypto-assets , the exemption provided under this regulation with respect to the cash settlement provisions of the csdr is not intended to exempt the dlt sss , or a third party issuing e-money tokens and settling the payment leg of securities transactions through its own accounts , from the licensing requirements under the regulation no 2021/xx on markets in crypto-assets.


### 6. at its request , a csd operating a dlt securities settlement system may be exempted by the competent authority from the application of articles 50 and/or article 53 on standard link access and access between a csd and another market infrastructure of regulation (eu) no 909/2014 , provided that it demonstrates that the use of a dlt is incompatible with legacy systems of other csds or other market infrastructures or that granting such access to another csd or another market infrastructure using legacy systems would trigger disproportionate costs , given the size of the dlt securities settlement system. ### 6. at its request , a csd operating a dlt sss may be exempted by the competent authority from the application of articles 50 and/or article 53 on standard link access and access between a csd and another market infrastructure of regulation (eu) no 909/2014 , provided that it demonstrates that the use of a dlt is incompatible with legacy systems of other csds or other market infrastructures or that granting such access to another csd or another market infrastructure using legacy systems would trigger disproportionate costs , given the size of the dlt securities settlement system.


### 7. where a csd operating a dlt securities settlement system has requested an exemption in accordance with the first sub-paragraph , it shall give access to other csds operating a dlt securities settlement system or to dlt mtfs. ### 7. where a csd operating a dlt sss has requested an exemption in accordance with the first sub-paragraph , it shall give access to other csds operating a dlt sss or to dlt mtfs.


### where a csd operating a dlt securities settlement system requests an exemption in accordance with paragraphs 2 to 6 , it shall in any case demonstrate that: ### where a csd operating a dlt sss requests an exemption in accordance with paragraphs 2 to 6 , it shall in any case demonstrate that:


### the exemption requested is proportionate to and justified by the use of its dlt , and; ### the exemption requested is proportionate to and justified by the use of a dlt , and;


### the exemption requested is limited to the dlt securities settlement system and does not extend to any other securities settlement system as defined in article 2(10) of regulation (eu) no 909/2014 operated by the same csd. ### the exemption requested is limited to the dlt sss and does not extend to any other securities settlement system as defined in article 2(10) of regulation (eu) no 909/2014 operated by the same csd.


### 8. where a csd has requested and been granted an exemption under paragraph 3 , the requirement in article 39(1) of regulation (eu) no 909/2014/eu for member states to designate and notify the securities settlement system operated by the csd in accordance with directive 98/26/ec shall not apply to the dlt securities settlement system. the foregoing shall not preclude member states from designating and notifying a dlt securities settlement system in accordance with directive 98/26/ec where the dlt securities settlement system fulfils all of the requirements of that directive. ### 8. where a csd has requested and been granted an exemption under paragraph 3 , the requirement in article 39(1) of regulation (eu) no 909/2014/eu for member states to designate and notify the sss operated by the csd in accordance with directive 98/26/ec shall not apply to the dlt sss. the foregoing shall not preclude member states from designating and notifying a dlt sss in accordance with directive 98/26/ec where the dlt sss fulfils all of the requirements of that directive.


### they shall also have up-to-date , clear and detailed publically available written documentation , which may be made available by electronic means , defining the rules under which the dlt market infrastructure shall operate , including the agreed upon associated legal terms defining the rights , obligations , responsibilities and liabilities of the operator of the dlt market infrastructure , as well as that of the members , participants , issuers and/or clients using the dlt market infrastructure concerned. such legal arrangements shall specify the governing law , the pre-litigation dispute settlement mechanism and the jurisdiction for bringing legal action. ### they shall also have up-to-date , clear and detailed publically available written documentation , which may be made available by electronic means , defining the rules under which the dlt market infrastructure shall operate , including the agreed upon associated legal terms defining the rights , obligations , responsibilities and liabilities of the operator of the dlt market infrastructure , as well as that of the members , participants , issuers and/or clients using the dlt market infrastructure concerned. the same documentation shall also include the privacy notice containing the list of processing operations carried out in connection with the dlt market infrastructure , together with the roles and responsibilities of the entities involved in the processing of personal data. such legal arrangements shall specify the governing law , the pre-litigation dispute settlement mechanism and the jurisdiction for bringing legal action.


### they shall also have up-to-date , clear and detailed publically available written documentation , which may be made available by electronic means , defining the rules under which the dlt market infrastructure shall operate , including the agreed upon associated legal terms defining the rights , obligations , responsibilities and liabilities of the operator of the dlt market infrastructure , as well as that of the members , participants , issuers and/or clients using the dlt market infrastructure concerned. such legal arrangements shall specify the governing law , the pre-litigation dispute settlement mechanism and the jurisdiction for bringing legal action. ### they shall also have up-to-date , clear and detailed publicly available written documentation , which may be made available by electronic means , defining the rules under which the dlt market infrastructure shall operate , including the agreed upon associated legal terms defining the rights , obligations , responsibilities and liabilities of the operator of the dlt market infrastructure , as well as that of the members , participants , issuers and/or clients using the dlt market infrastructure concerned. such legal arrangements shall specify the governing law , the pre-litigation dispute settlement mechanism and the jurisdiction for bringing legal action.


### 2. a csd operating a dlt securities settlement system , and an investment firm or a market operator operating a dlt mtf requesting an exemption from article 3(2) of regulation (eu) no 909/2014 , shall establish rules on the functioning of the dlt they operate , including the rules for accessing the distributed ledger technology , the participation of the validating nodes , addressing potential conflicts of interest , and risk management including any mitigation measures. ### 2. a csd operating a dlt sss , and an investment firm or a market operator operating a dlt mtf requesting an exemption from article 3(2) of regulation(eu) no 909/2014 , shall establish or document , as appropriate , rules on the functioning of the dlt they use , including the rules for accessing the distributed ledger technology , the participation of the validating nodes ,addressing potential conflicts of interest , and risk management including any mitigation measures.


### 3. the operators of dlt market infrastructures shall provide their members , participants , issuers and clients with clear and unambiguous information on their website on how they carry out their functions , services and activities and how this performance of functions , services and activities deviates from an mtf or a securities settlement system. this information shall include the type of dlt used. ### 3. the operators of dlt market infrastructures shall provide their members , participants , issuers and clients with clear and unambiguous information on their website on how they carry out their functions , services and activities and how this performance of functions , services and activities deviates from an mtf or an sss. this information shall include the type of dlt used. furthermore , as natural persons may directly participate in dlt market infrastructures , if the payment leg of dlt transferable securities transactions were to occur on the books of a person who is not a licensed credit institution , this would have the consequence that the cash accounts held by natural persons , as well by legal persons such as micro , small and medium-sized enterprises , with dlt market infrastructures would not benefit from the deposit guarantee scheme protection under directive 2014/49/eu of the european parliament and of the council (the deposit guarantee schemes directive , dgsd) and of the depositor preference under directive 2014/59/eu of the european parliament and of the council (the ‘brrd’). the dgsd and the depositor preference under the brrd only apply to deposits in the form of a credit balance which results from funds left in an account or from temporary situations deriving from normal banking transactions and which a credit institution is required to repay. in this context , dlt market infrastructures should explicitly disclose to their participants that they are not protected under the relevant dgsd and brrd provisions.


### the operators of dlt market infrastructures shall have a specific operational risk procedure for the risks posed by the use of a dlt and crypto-assets and on how these risks would be addressed if they materialised. ### the operators of dlt market infrastructures shall have a specific operational risk management procedure for the risks posed by the use of a dlt and crypto-assets and on how these risks would be addressed if they materialised.