Crypto Assets

Article 3 of MiCA defines a crypto asset as a digital representation of a value or of a right that can be transferred and stored electronically, using distributed ledger technology or similar technology. The definition is technology-neutral: it covers tokens on public blockchains such as bitcoin as well as tokens on private ledgers that banks run.

MiCA does not apply to crypto assets that already qualify as financial instruments under MiFID II, as deposits or as funds. A tokenized share or bond therefore stays a security, and digital securities follow securities law instead of MiCA.

MiCA sorts all crypto assets that fall under it into three classes with different rules. E-money tokens keep a stable value by referring to one official currency, as euro stablecoins do, and only banks and e-money institutions may issue them.

Asset-referenced tokens refer to several currencies, commodities or other assets. All other crypto assets form the third class, which includes bitcoin, ether and utility tokens that give access to a good or service of the issuer.

A cryptocurrency is a crypto asset that is used as a means of payment or store of value, such as bitcoin. Crypto assets is the wider term: it also covers tokens that represent a claim, a voting right, access to a service or a reference to other assets.

Supervisors and laws in Europe use crypto assets, while newspapers and private investors often say cryptocurrency. For a bank the term decides which license, which capital rule and which reporting duty applies.

Firms that hold, exchange, transfer or advise on crypto assets for clients need a license as a crypto-asset service provider under MiCA. Banks and investment firms can offer the same services after a notification to their supervisor, which in Germany is BaFin under the Kryptomärkteaufsichtsgesetz, KMAG.

Since 30 December 2024 every transfer of crypto assets between service providers must carry data on sender and recipient under the EU travel rule. Germany had required the same data earlier through its Kryptowertetransferverordnung.

The OECD Crypto-Asset Reporting Framework obliges service providers to report the crypto transactions of their clients to tax authorities. The EU adopted it as DAC8, which applies from 1 January 2026, and Germany transposes it with the Kryptowerte-Steuertransparenzgesetz, KStTG.

Banks that hold crypto assets follow the Basel standard for crypto exposures, which applies from 1 January 2026. Tokenized traditional assets and stablecoins that pass its tests fall into group 1, while unbacked crypto assets such as bitcoin fall into group 2 with a risk weight of up to 1,250 percent.