IRELAND Law and Practice Contributed by: Niall Esler, Shane Martin, Laura Whitson and Coleen Wegmann, Walkers
10.11 Virtual Currencies The legal treatment of any cryptocurrency or other blockchain asset will be determined by whether that particular asset’s features come within the scope of existing legislative and regulatory regimes. Typically, a pure cryptocurrency will not be considered a financial instrument under MiFID II but would be considered a crypto-asset within the scope of MiCAR. 10.12 NFTs MiCAR will not apply to crypto-assets that are unique and not fungible with other crypto-assets. The recitals to MiCAR state that the fractional parts of a unique and non-fungible crypto-asset should not be consid - ered unique and non-fungible, and that the issuance of crypto-assets as NFTs in a large series should be considered as an indicator of their fungibility. There - fore, categorisation will depend on the individual char - acteristics of an NFT. A case-by-case analysis is also required to under - stand if an NFT would be considered a financial instru - ment under MiFID. 10.13 Stablecoins Under MiCAR, a person cannot make an offer to the public or seek admission to trading of an ART or EMT unless that person is the issuer and: • in the case of an ART, that issuer is established in the EU and authorised under MiCAR, or alterna - tively is authorised as a credit institution, unless an exemption applies; or • in the case of an EMT, the issuer is authorised as a credit institution or an e-money institution, unless an exemption applies. There are a number of obligations an issuer must com - ply with, including conduct, prudential and disclosure requirements, such as publishing a white paper con - taining information on the relevant ART/EMT, as well as redemption requirements. ART issuers must main - tain a reserve of assets to ensure risks associated to the asset referenced are covered and any liquidity risks are addressed. Furthermore, stabilisation mech - anisms and custody procedures must be accounted for and described in policies. EMT issuers must ensure that funds received in exchange for EMTs are invested
and safeguarded in accordance with MiCAR. Addi - tional obligations are imposed on issuers of significant ARTs/EMTs, as classified in MiCAR.
11. Open Banking 11.1 Regulation of Open Banking
PSD2 introduced two new regulated payment ser - vices which, in summary, allow customers to use third parties to obtain payment initiation services, and enable third parties to access payment data to provide account information services. This facilitates open banking. Application programming interfaces are to be used for third-party access to online pay - ment accounts. As part of the review of PSD2, the Commission carried out a targeted consultation on the open finance frame - work and data sharing in the financial sector. PSD3 will seek to improve the functioning of open bank - ing through the removal of the remaining obstacles to the provision of open banking services, by improving customers’ control over their payment data and by enabling new innovative services to enter the market. 11.2 Concerns Raised by Open Banking PSD2 imposes certain conditions on access to and use of data by firms providing a payment initiation service or account information service. This includes a requirement for customer consent and other require - ments in relation to security and the use of data. In addition, the GDPR requires customers to be made fully aware – in a clear, concise and transparent fash - ion – of how their personal data will be used and by whom. It also provides for the rights to withdraw con - sent, to access data and for information to be erased. In sharing data with third parties such as account information service providers, banks will need to be aware of the potential for fraud or other risks.
12. Fraud 12.1 Elements of Fraud
Fintech firms are at the forefront of fraud-related inci - dents, with the most common examples being credit
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