AUSTRIA Law and Practice Contributed by: Oliver Völkel, Jara Erhard and Bryan Hollmann, CERHA HEMPEL
tokens (ARTs) (see 2.2 Crypto-Asset Regulatory Frameworks and 6.2.2 Stablecoin Regulation ). Algorithmic Stablecoins Are Subject to MiCA Since merely purporting to maintain a stable value suffices, stablecoins with no functional peg at all are also covered by this definition. Since neither defini- tion makes any reference to a particular mechanism of how to maintain the peg, the definitions also cover “algorithmic” stablecoins. Note, however, that Title III and IV MiCA lay out a number of obligations for issu- ers of such tokens which are in direct conflict with how an algorithmic stablecoin maintains its peg. MiCA Does Not Cover Fully Decentralised Protocols This does not mean that algorithmic stablecoins are completely unattainable under MiCA, however. The solution is to structure the protocol in a “fully decen- tralised manner” and “without any intermediary”. Such systems do not fall within the scope of MiCA (see MiCA Recital 22). However, this raises questions about the precise meaning of “without an interme- diary” and “in an exclusively decentralised manner”. Put simply, a protocol that operates without the need for any party to fulfil promises qualifies under these criteria. One could also use the term “trustless” to characterise fully decentralised systems. 6.2.2 Stablecoin Regulation Under MiCA, stablecoins are subject to a bespoke, fully harmonised EU framework. EMTs and ARTs sit at the intersection of MiCA and pre-existing regimes. • EMTs are both a type of crypto-asset under MiCA and a form of electronic money under the e-money regime; issuers must therefore be authorised as credit institutions or e-money institutions and com- ply with EMT-specific MiCA obligations (eg, white paper, governance, reserve, redemption) and core e-money/payment-services rules. • ART issuers are licensed and supervised under MiCA and must comply with detailed rules on own funds, reserve assets, governance, disclosure and redemption, but ARTs are not treated as e-money. For business models of CASPs involving EMTs, there is a potential dual-licensing overlay: a firm can be
failures, protocol hacks or governance exploits. In practice, where DeFi-related activity causes harm with a sufficient Austrian nexus, authorities and courts would look for any identifiable person or entity behind the protocol and treat that party as the responsible actor. This will typically be the company, foundation or identifiable team that operates the front end, promotes or markets the protocol, sets key parameters (such as fees, listings and risk settings) or participates eco- nomically in protocol revenues. Such Austria-linked entities are the natural addressees for supervisory measures, administrative sanctions, potential crimi- nal liability (for example, fraud) and, where relevant, for civil damage claims. Both volatile crypto-assets (such as Bitcoin) and sta- blecoins (such as USDC) can be used as a means of exchange in Austria, and an increasing number of businesses – particularly in cross-border commerce – accept crypto as payment. Crypto-assets are not legal tender, but private parties are generally free to agree on settlement in crypto, and there are currently no statutory limits on the size or value of a crypto payment. From a regulatory perspective, the use of crypto- assets as a payment medium between commercial parties is largely unregulated as such. However, inter- mediaries that provide regulated crypto‑asset servic- es (eg, exchange, custody, execution of orders) must be authorised under MiCA as CASPs. Where the token used for payment qualifies as an EMT or a financial instrument, the existing e‑money, payment‑services and/or securities frameworks also apply in parallel (see 6.2.2 Stablecoin Regulation ). 6.2 Stablecoins 6.2.1 Fiat Currency and Algorithmic Stablecoins Distinction Between Fiat Currency and “Algorithmic” Stablecoins MiCA does not distinguish between “fiat-backed” and “algorithmic” stablecoins as separate regulatory categories, but instead classifies them functionally as either e-money tokens (EMTs) or asset-referenced 6. Payments and Stablecoins 6.1 Payments
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