BACS (Blockchain Arbitration & Commerce Society) has submitted its response to the European Commission’s targeted consultation on the review of the Markets in Crypto-Assets Regulation (MiCA), which closes on 31 August 2026. The response is extensive — 86 questions across four thematic parts — and BACS has added something beyond an opinion: a concrete legislative reform proposal.
The diagnosis: a missing legal layer, not just a prudential one
Throughout its response, BACS argues a central point: MiCA protects holders of crypto-assets and stablecoins primarily through capital, reserves, and issuer conduct requirements. That’s necessary, but not sufficient. What’s missing is a layer of legal certainty ensuring that, when something goes wrong, those rights can actually be enforced.
A holder with a €500 contested redemption claim against an issuer established in another Member State has, today, no realistic recourse: ordinary cross-border civil litigation costs more than the claim is worth. A DeFi user affected by a smart contract exploit is, in practice, left without any accessible remedy. This absence of proportionate enforcement — not a lack of rights as such — is, in BACS’s view, the most urgent gap left unaddressed by the current framework.
The proposal: a European Digital Legal Infrastructure Regulation
As an annex to its response, BACS submitted a draft legislative proposal: an optional Digital Legal Infrastructure Regulation, which issuers and protocols could freely choose to incorporate into their issuance terms or smart contracts. The proposal is structured around four components:
Digital entitlement, recognising tokens as objects of proprietary rights without requiring a rewrite of each Member State’s own property law.
A “container” rule for tokens representing off-chain assets (securities, membership interests, intellectual property rights), inspired by frameworks already in force, such as Liechtenstein’s TVTG.
A conflict-of-laws rule specific to assets recorded on distributed ledger technology — something that simply does not exist yet under European law.
Legal recognition of blockchain-compatible arbitration and “legal oracles” — mechanisms capable of translating an off-chain judicial or arbitral decision into effective on-chain enforcement.
This last component is, for BACS, the most important. It is also the one that connects most directly to our own institutional mission as an arbitration body specialised in digital assets — something we have chosen to disclose with full transparency within the proposal text itself, including explicit consumer-protection safeguards to ensure arbitration always complements, and never replaces, the right to bring proceedings before national courts.
The stablecoin positions
Beyond legal infrastructure, BACS calls on the Commission to recalibrate the prudential regime for stablecoins (ARTs and EMTs). Specifically:
Less mandatory bank deposit, more EU sovereign debt. Article 36(4) of MiCA currently requires issuers to hold between 30% and 60% of reserves in bank deposits. BACS proposes shifting that weight toward short-duration, high-quality EU sovereign debt, reducing counterparty concentration in the banking sector and strengthening demand for EU public debt — in line with the direction taken, for instance, by the US GENIUS Act.
Conditional openness to interest payment. BACS supports relaxing, under defined conditions, the current ban on remunerating stablecoin holders, so that a euro-denominated EMT is not systematically left at a disadvantage compared to an ordinary bank deposit.
The international role of the euro. Both measures, BACS argues, are not merely technical questions of prudential calibration: they are direct levers for strengthening the euro’s role as a reference currency in global digital markets.
Next steps
BACS’s full response — including the annex with the proposed draft articles — is available on request. The Commission’s consultation remains open until 31 August 2026, and BACS will continue its technical engagement with European institutions on these issues in the coming weeks.
If you’d like to learn more about this proposal or discuss any part of it with us, get in touch with BACS.
