In 2023, the European Union introduced the Markets in Crypto-Assets (MiCA) regulation – a landmark framework to bring crypto-assets, especially stablecoins, under regulatory oversight. One key category defined by MiCA is the Asset-Referenced Token (ART). These tokens are essentially stablecoins designed to maintain a stable value by being tied to a basket of assets or other non-currency values, rather than a single national currency. In this article, we explore what ARTs are according to MiCA, how they differ from other tokens, and what rules govern their issuance and use. We’ll break down the definition, provide examples, and explain why this new regulation is important for consumers and the crypto industry.
What Are Asset-Referenced Tokens (ART) in MiCA?
Asset-Referenced Tokens (ARTs) are defined in the MiCA regulation (EU) 2023/1114 as crypto-assets intended to keep a stable value by referencing one or several assets other than a single fiat currency.
In the legal text (Article 3 of MiCA), an ART is described as “a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies”.
In simpler terms, an ART is a stablecoin whose price is linked to a basket of currencies, commodities, crypto-assets, or other assets – or even a mix of these – rather than just one government-issued currency.
To clarify, MiCA distinguishes ARTs from the other type of stablecoin called Electronic Money Tokens (EMTs). EMTs are tokens that maintain stable value by referencing only one official currency (like one token = 1 Euro or 1 US Dollar). If a token’s stability mechanism involves more than one currency or includes non-currency assets, then it falls under the ART definition. Essentially:
- ART = stablecoin referencing multiple currencies or other assets (or a combination of them).
- EMT = stablecoin referencing a single fiat currency (one official currency).
By definition, ARTs explicitly exclude any token that is just pegged 1:1 to a single national currency (those are EMTs). This categorization was introduced to ensure that all forms of asset-backed stablecoins are covered by regulation, preventing issuers from avoiding rules by using baskets or non-currency assets.
Examples of Asset-Referenced Tokens
To better understand ARTs, it helps to look at real or proposed examples of what would qualify as an asset-referenced token:
- Libra/Diem (Facebook’s stablecoin proposal) – The now-abandoned Libra project by Facebook (later renamed Diem) is a prime example. Libra was conceived as a cryptocurrency backed by a basket of low-volatility assets (multiple currencies like USD, EUR, JPY, GBP, etc., and government bonds). Its value was to be determined by a mix (for instance, 50% USD, 18% EUR, 14% JPY, 11% GBP, 7% SGD in one early plan). Because it referenced several official currencies and assets, Libra would have been classified as an ART under MiCA. In fact, such global “basket-backed” stablecoins were a major impetus for regulators to create the ART category.
- PAX Gold (PAXG) – PAX Gold is a crypto token backed by physical gold; each token represents one fine troy ounce of gold held in vaults. Since it maintains its value by referencing a commodity (gold) rather than a fiat currency, PAXG would be considered an asset-referenced token. Its price stays stable relative to gold’s market price. Other precious metal or commodity-backed tokens (e.g., silver or oil tokens) similarly fall into the ART category.
- Multi-asset Stablecoins – Any stablecoin that uses a mixture of asset types to stabilize value qualifies as an ART. For example, a token that is designed to hold a steady value by being 50% pegged to the euro and 50% to a stock index, or a token backed by a basket of cryptocurrencies, would be an ART. These tokens peg themselves to a defined basket of assets rather than one currency. They are part of the broader stablecoin family, but with more complex backing.
- Algorithmic/ Crypto-Collateralized Stablecoins – Even if a token’s target value is a single currency (say 1 USD), if it achieves that stability using other crypto assets as collateral or reference, regulators may treat it as an ART. A recent example is Ethena’s USDe stablecoin in 2025, which aimed to track the US dollar’s value but was entirely backed by reserves of other cryptocurrencies like Bitcoin and Ether. Because its stability depended on a crypto-asset reserve rather than holding actual USD, the German regulator BaFin deemed USDe to be an asset-referenced token that required authorization under MiCA. This shows how even a dollar-denominated stablecoin can be classified as an ART if its reference mechanism involves non-fiat assets.
In summary, ARTs are essentially “basket-backed” or “asset-backed” stablecoins. They can include combinations of fiat currencies, commodities, or crypto assets. By contrast, popular single-currency stablecoins like Tether (USDT) or USD Coin (USDC) – which peg 1:1 to the US dollar – would be classified as e-money tokens (EMTs) under MiCA, not ARTs. Both types are subject to regulation, but ARTs typically raise additional considerations due to their diverse underlying assets.
Why Did MiCA Create the ART Category?
The introduction of ARTs as a distinct category is a response to the evolving stablecoin market and its potential risks. Prior to MiCA, certain stablecoins could fall outside traditional e-money laws – especially those not strictly pegged to one currency. By classifying and regulating ARTs, the EU aims to prevent regulatory circumvention and address the specific risks these multi-asset-backed tokens pose.
Some reasons why ARTs warranted special attention include:
- Global Stablecoin Projects: The proposal of Libra (Diem) in 2019 raised alarms globally. A stablecoin used by billions, backed by a basket of currencies, could potentially impact monetary policy and financial stability. MiCA’s ART framework was in part designed to ensure that any similar “global stablecoin” would face strict regulatory scrutiny and requirements in the EU.
- Investor Protection: ARTs, like other stablecoins, promise price stability. If poorly managed, they could fail to maintain their peg, leading to losses or panic (as seen in some algorithmic stablecoin collapses). The ART rules compel issuers to have robust safeguards (like asset reserves and redemption rights) so that retail holders are protected.
- Market Integrity and Financial Stability: A widely adopted ART could become a de-facto payment method or store of value. MiCA’s recitals note that ARTs might be used for transferring value or as a means of exchange by many people, thus increasing risks to markets and even monetary sovereignty. By regulating ARTs, authorities can monitor and mitigate threats such as runs on stablecoins or excessive reliance on non-euro tokens for payments in Europe.
- Clarity for Innovators: By clearly defining ARTs vs. EMTs, MiCA provides clarity to crypto projects. Businesses know which rules apply to them. This encourages compliant innovation – projects can design tokens with the knowledge of how they’ll be classified. It also levels the playing field by ensuring all stablecoin-like products are subject to comparable standards.
In essence, the ART category closes gaps in regulation. Whether a token is pegged to gold, a basket of 5 currencies, or a mix of crypto and fiat, it can’t avoid oversight by claiming “it’s not just one currency, so it’s not e-money.” MiCA captures all such stable-value tokens under either ART or EMT, bringing comprehensive oversight.
How MiCA Regulates Asset-Referenced Tokens
MiCA imposes a comprehensive set of rules on ART issuers to ensure these tokens are safe, transparent, and stable. If a company or organization wants to issue an asset-referenced token in the EU (for example, offer it to the public or list it on exchanges), they must comply with strict requirements. Here are the key aspects of the regulatory framework for ARTs under MiCA:
- Authorization and Supervision: Issuers of ARTs must be authorized by a competent regulator in an EU member state before offering tokens to the public or seeking a trading listing. Only legal entities with a registered office in the EU can issue ARTs. This means a company can’t just sell a stablecoin in Europe without establishing an EU presence and getting approval. Once authorized, the issuer can passport its token across the whole EU market. Smaller or limited-scope offerings have some exemptions (e.g. if the total token value is under €5 million or only offered to qualified investors, the full license may not be required), but even then a notification and a crypto-asset white paper are required. Supervision of ART issuers is ongoing: national regulators (and for large tokens, the European Banking Authority) will oversee compliance. Notably, if an ART is deemed “significant” in size/systemic importance, the European Banking Authority (EBA) takes over direct supervision from the national authority. (Significant ARTs are those with a large user base or market cap, etc., which could impact financial stability.)
- Transparency – White Papers and Disclosures: Every ART issuer must publish a detailed crypto-asset white paper (similar to a prospectus) outlining how the token works, what it’s backed by, rights of token holders, risks, etc. This document must be filed with regulators and made public to ensure potential buyers understand what they’re getting into. Marketing communications must be fair and not misleading, and consistent with the white paper. Ongoing disclosures are required too – issuers have to regularly report on the status of reserves and any major events that could affect the token’s value.
- Reserve of Backing Assets: Perhaps the most critical rule – ART issuers must at all times maintain a reserve of assets that fully backs the token’s value. The reserve composition will depend on what the token references (it could be fiat money in bank accounts, government bonds, commodities, crypto collateral, etc.), but it needs to be conservative and liquid enough to preserve stability. The law requires the reserve assets to be managed to minimize risks – for instance, there may be limits on investing reserves in risky assets. The reserve has to be independently audited and monitored. In the event that the token’s price deviates, the issuer might use the reserve to stabilize it (e.g., by buying back tokens). Regulators can also impose intervention if reserves or practices are unsafe.
- Redemption Rights: MiCA ensures that holders of ARTs have the right to redeem their tokens directly from the issuer at (or close to) the stable value. In fact, the regulation states that holders must have a permanent right to redemption at any time. Upon request, an issuer has to redeem the ART – typically by paying out in fiat money (or possibly delivering the equivalent value in the reference assets). For example, if you hold an ART worth €100 in a basket of currencies, you should be able to redeem it for €100 (or the equivalent mix of those currencies/assets) from the issuer. No fees can be charged for redemption either, ensuring consumers can cash out without penalty. This redemption mechanism is crucial: it keeps the price of the token anchored and gives investors confidence that the token truly holds its value. If an issuer faces a run of redemptions, regulators have powers to temporarily suspend redemptions to protect wider financial stability, but generally the promise of convertibility must be honored.
- Capital and Prudential Requirements: To further protect against insolvency or shortfalls, ART issuers must hold a certain amount of own capital (equity) as a buffer. MiCA mandates a minimum capital requirement for ART issuers of the greater of €350,000 or 2% of the average reserve assets, among other measures. In practice, for large stablecoins this means the issuer’s shareholders’ funds should equal at least 2% of the token’s reserve value. This capital is like a safety cushion – if the reserve assets suffer an unexpected loss in value, the issuer’s own funds can absorb the hit so that token holders remain whole. Regulators can even demand higher capital (up to +20% more) if the token is riskier or as stress test results dictate. Additionally, issuers must conduct stress tests on their reserves and operations, have sound governance, and put in place contingency plans (like a recovery and orderly wind-down plan) in case things go wrong.
- Operational and Investor Safeguards: Issuers of ARTs have a slew of other obligations to run their business prudently. They must have a fit and proper management team, segregation of reserve assets (so the reserves are protected even if the issuer goes bankrupt), clear complaints-handling procedures for token holders, and policies to manage conflicts of interest. They also have to notify regulators of major changes (like changes in leadership or in how the reserve is managed). If an ART becomes “significant” (systemically important), even stricter rules kick in under MiCA’s Title III, such as more frequent reporting, liquidity management policies, interoperability requirements, and closer supervision by the EBA.
- Limits on Non-EU Pegged Tokens: In a bid to protect the EU’s monetary sovereignty, MiCA includes provisions to constrain the use of stablecoins not denominated in EU currencies if they become too popular. In other words, an ART referencing foreign currency (like USD) that sees very large volume might face limits when used as a means of payment. This was a late addition aimed at ensuring the euro’s dominance isn’t eroded by private tokens. ARTs not pegged to a European currency could be restricted in their scale of activity in the EU, a sign of the EU’s cautious approach to dollar-pegged stablecoins in daily commerce.
All these measures collectively ensure that an ART operates in a sound, transparent, and secure manner. From a user’s perspective, if you buy an asset-referenced token under MiCA’s regime, you should benefit from clear disclosures, strong backing of the token’s value, the ability to redeem your token, and oversight by regulators in case of any mismanagement.
Why Asset-Referenced Tokens Matter
For everyday users, ARTs promise the stability of traditional assets combined with the efficiency of crypto. For example, an ART could let someone hold a token that’s as stable as a basket of major currencies or gold – useful as a hedge or payment method – without the volatility typical of cryptocurrencies like Bitcoin. Under MiCA, these promised stabilities are more than just words; they are legally enforced obligations on issuers.
From a consumer protection standpoint, the regulation of ARTs is significant. Crypto history has seen stablecoins break their peg or issuers mismanage reserves, leading to investor losses. With MiCA’s rules:
- Investors have legal rights and information. They can redeem tokens and are entitled to clear info about what backs the token. This reduces the trust deficit – you don’t have to blindly trust a company’s claims, since regulators and audits are checking the reserves.
- Reduced risk of collapse: The required capital buffers and risk management make an ART less likely to fail abruptly. Even if one did falter, authorities can intervene early (for instance, temporarily halt redemptions in an orderly way) to prevent panic from spreading. This is crucial for financial stability, especially if a stablecoin became widely used.
- Accountability: Only approved, supervised entities can issue ARTs in the EU. This weeds out fly-by-night operators. If an issuer violates the rules, they face penalties or loss of license. We have already seen enforcement in action: in March 2025, BaFin (Germany’s regulator) ordered a halt to the USDe token offering because the issuer had not met MiCA’s ART requirements. Such actions show that regulators are actively policing the market to ensure compliance and protect users.
For the broader crypto market, the ART framework brings legitimacy and trust. Reputable projects can now launch stablecoins with the confidence that they have clear guidelines to follow, potentially attracting more users who were cautious of unregulated stablecoins. Over time, we may see truly innovative ARTs – imagine a token stabilized by a combination of eco-friendly assets, or a basket of inflation-resistant assets – serving niche user needs under a safe structure.
It’s also worth noting that while MiCA covers the EU, its effects are global. International crypto firms that want access to the European market will have to adapt to these standards. This could set a global benchmark for stablecoin regulation (much like Europe’s GDPR influenced global data privacy standards). Other jurisdictions are watching how the EU handles ARTs and may introduce similar rules to avoid becoming havens for unregulated stablecoin issuers.
Conclusion
Asset-Referenced Tokens (ARTs) represent an important class of stablecoins, one that can transform how value is stored and transferred by tying digital tokens to real-world assets or baskets of currencies. Under the EU’s MiCA regulation, ARTs are finally defined and brought into the regulatory fold. By clearly outlining what an ART is and enforcing strict rules on issuers, MiCA aims to ensure these crypto-assets live up to their name – staying truly stable and trustworthy.
For the average person, this means that if you use an ART issued under MiCA, you can expect a high degree of safety: the token’s value is backed by real assets, the issuer is vetted and capitalized, and you have rights to redeem your money. For the crypto industry, the regulation provides a clear path to innovate with stablecoins in a compliant way, potentially spurring new financial products that blend stability and decentralization.
As of 2025, MiCA’s rules for ARTs are in effect, marking a new era of accountable and resilient stablecoins. Whether it’s a digital token for gold or a multi-currency coin for global commerce, asset-referenced tokens are set to play a growing role in finance – and thanks to MiCA, they’ll do so under prudent oversight. This balance of innovation and regulation could be key to unlocking the next phase of growth in the crypto-assets space, giving users the benefits of cryptocurrency without the wild swings in value. Asset-referenced tokens, in short, combine the best of both worlds: crypto’s efficiency and the stability of traditional assets, all within a framework designed to keep them safe, transparent, and reliable.
