EU Crypto-Asset Framework — Public Consultation Response

01 — Token Classification

Classification by function produces an unbounded hybrid category. The moment a token serves more than one purpose — as most do — it escapes clean classification. A taxonomy based on the legal rights attached to the token is more durable: it does not depend on how an issuer characterises intended use, and it does not shift as market usage evolves.

02 — Stablecoins and Monetary Sovereignty

The efficacy of national monetary policy measures will diminish as stablecoin diversification effects grow on a global level.

This was written in March 2020, before the GENIUS Act, before USDT surpassed $130 billion in circulation, and before Tether became one of the most profitable financial entities on earth — extracting yield from US Treasury reserves that no token holder receives. The monetary sovereignty concern was real. The policy response — the interest prohibition in MiCA — addressed the symptom and not the cause.

03 — National Regimes and Liechtenstein's TVTG

The Liechtenstein Token and Trusted Technology Service Providers Act (TVTG) entered into force in 2020. It defines a token as a legal container for rights stemming from an underlying asset — transfer of the token is legally valid transfer of the rights, with full third-party effect. It has operated continuously since then. The EU has had six years to observe a working proof of concept in an EEA member state. The recommendation made here in 2020 was not followed in MiCA's design. It remains the right answer for MiDA.

04 — Civil Law Harmonisation

This is the 28th regime argument. A functional approach to token property law — specifying the legal consequences of ledger entries without requiring harmonisation of all underlying national property law — is the only instrument that produces cross-border enforceability. The political opposition is real and was real in 2020. It remains the correct position.

05 — DLT and the CSDR

We need a complete new CSD definition to exploit the full potential of securities on the blockchain.

Europe currently operates 32 CSDs. The US operates one. Settlement costs in Europe run 65% higher than North America. The CSDR overhaul recommended here in 2020 did not materialise. The DLT Pilot Regime arrived instead — a sandbox that leaves the underlying CSD architecture intact. MiDA is the next opportunity to address the structural problem rather than work around it.

06 — Token Property Law and Conflicts of Law

That last observation has since proved correct. Liechtenstein, Switzerland, and the UAE attracted the most sophisticated token issuers precisely because they offered legal certainty that EU member states could not provide. The race to the most favourable jurisdiction was entirely predictable in 2020. It has materialised exactly as predicted.

07 — Prospectus, Disclosure, and Token Identification

The lost private key question — flagged here in 2020 as a disclosure item — is in fact a structural legal problem that no EU framework has yet addressed. If tokens are permanently inaccessible, no majority acquirer can ever reach 100% ownership. Squeezeout provisions, compulsory acquisition thresholds, and minority buy-out procedures all assume traceable minority holders. They are silent on irrecoverable token positions. This is a gap MiDA must fill.

08 — Settlement Finality and DLT Clearing

The digital euro and Pontes — the ECB's connection of DLT platforms to TARGET Services — are the answer to this question, six years later. The architecture was clear in 2020. The infrastructure is only now arriving.

— Six Positions. Six Years. The Verdict.

Positions argued in March 2020 — status in May 2026

• Q15 — Liechtenstein TVTG as the model for EU token property law. Not followed in MiCA. Remains the right answer for MiDA. The EU has had six years to observe a working proof of concept in an EEA member state.
• Q13 — Global stablecoins will erode monetary policy efficacy through diversification effects. USDT at $130bn+ confirms the concern. The MiCA interest prohibition addressed the symptom, not the cause. Tether's estimated 2024 net profit of ~$13 billion was an unintended consequence.
• Q88 — CSDR requires a complete overhaul for DLT environments. The DLT Pilot Regime arrived instead. The 32-CSD architecture remains. The structural problem has not been addressed.
• Q18 — Harmonisation of national civil laws governing token transfers is unavoidable. Still unresolved. The MiDA consultation is the next and possibly last opportunity before national positions calcify.
• Q88.2 — DLT cash-leg settlement requires a dedicated stablecoin or digital euro. Pontes connects DLT platforms to TARGET Services from Q3 2026. The architecture was clear in 2020. The infrastructure arrives six years later.
• Q94 — Without international cooperation, issuers will concentrate in the most favourable jurisdiction. Confirmed. Liechtenstein, Switzerland, UAE, and Singapore attracted what the EU could not retain.
• Q83.1 — Lost private keys require a legal mechanism in the prospectus and in squeezeout law. No EU framework has addressed this. It remains an open structural problem for tokenised equity.