Electronic Money Token (EMT)
An electronic money token (EMT) is a cryptographic token used for exchange and is pegged to a single fiat currency. The biggest difference between an asset-referenced token (ART) is that it can only be pegged to one fiat currency, for example, Tether or USDC.
As per MiCA, EMTs are to be backed by tangible world assets. E.g. if an issuer issues EUR 100 000 of a Euro-pegged EMT, the issuer would need to have EUR 100 000 (or assets denominated in EUR) stored somewhere, i.e. in a vault or bank account.
Like Electronic Money, which holds a one-for-one equivalence, EMTs operate similarly but are based on Distributed Ledger Technology (DLT).
With the implementation MiCA of the framework, EMT issuers and providers will be subject to further obligations, such as:
The European Banking Authority (EBA) will supervise and regulate all EMTs.
EMT issuers will need an Emoney license (falling under the Electronic Money Directive) and a MiCA license to be legally allowed to issue EMTs.