On 30 September the deadline expires for responding to the European Commission’s consultation on the review of the MiCA Regulation — the 86-question survey through which Brussels is testing what works, what does not and what should change in Europe’s first major crypto-asset law. BACS submitted its full response this summer. This article summarises, in plain language, what we said and why.
The idea running through our entire response
MiCA has solved one part of the problem: prudential protection. We now know who may issue a crypto-asset or provide services over it, with what capital, what client disclosures and under which supervisor. That is valuable, and BACS has defended it.
What MiCA has not solved is the other half: legal effectiveness. When something goes wrong between private parties — a custodian fails, an asset is stolen, a contract is disputed between parties in three countries — the Regulation is silent, and the answer falls to twenty-seven national laws never designed for this object. A market can be perfectly supervised and remain legally fragile. That distinction — prudential protection is not the same as legal effectiveness — is the thread running through the 86 answers we submitted. We develop it in detail in our article on MiCA’s private-law gaps.
What we proposed, in five points
1. Stablecoin reserves: more short-dated EU sovereign debt. We proposed recalibrating the reserve requirements for e-money tokens towards short-duration EU sovereign debt instruments. This strengthens token stability, deepens the European debt market and prevents euro stablecoin reserves from ending up financing other markets.
2. Conditional remuneration for holders. The general prohibition on remunerating stablecoin holders deserves review: we argued for allowing interest-equivalent remuneration under strict conditions. If reserves generate yield, a regulated framework for sharing it with holders is healthier than pushing that demand towards opaque products or outside the Union.
3. An applicable-law rule anchored in party autonomy. For proprietary questions over crypto-assets, we proposed a conflict-of-laws rule that respects the parties’ choice of governing law. It is the criterion that works best for an object that defies physical location, and it gives operators what they need most: predictability.
4. Express recognition of blockchain-compatible arbitration and “legal oracles”. Disputes over assets that move in minutes cannot depend solely on proceedings that take years. We asked Union law to expressly recognise arbitration mechanisms adapted to the digital environment and legal oracles — the bridge that translates a legal decision (an award, an interim measure) into a verifiable effect on the infrastructure itself. With one safeguard that for BACS is non-negotiable: arbitration must never exclude consumers’ access to the courts; we are talking about adding avenues, not closing them.
5. An articulated legislative annex. We did not limit ourselves to pointing out problems: we accompanied the response with a proposal for a European Digital Legal Infrastructure Regulation — twenty articles addressing the proprietary recognition of digital assets, transfer rules, client protection in custodian insolvency, and the integration of resolution and enforcement mechanisms. It is a starting point for the debate, drafted as a legal text because debates move faster when there is a text on the table.
Why we respond
BACS is a non-profit institution dedicated to the legal infrastructure of the digital economy. We believe Europe has the opportunity to complete MiCA with the layer it lacks — private law and effectiveness — and that this layer will determine whether the European crypto-asset market competes on genuine legal certainty or on supervision alone.
For a deeper dive, see our analysis of the five private-law gaps. The full text of the BACS response is available to interested institutions, academics and practitioners.
The consultation remains open until 30 September. If your organisation works with crypto-assets and has not yet participated, there is still time: every response helps the review reflect the reality of the market.
BACS is an association registered in the EU Transparency Register (REG 9106897105368-14). BACS operates a Court of Arbitration specialised in digital assets and therefore has a direct institutional interest in the recognition of the dispute-resolution mechanisms its response proposes.
