FAQ

EMT (E-Money Token) references a single official currency (USD, EUR, GBP…). Examples: RLUSD, USDC, EURt. Issuer must be an EMI or credit institution. Reserves 1:1 in cash/liquid low-risk assets, fully segregated.

ART (Asset-Referenced Token) references multiple currencies, commodities, or assets — or a basket. Examples: multi-fiat stablecoins, commodity-backed tokens, large fungible NFT series. Issuer needs NCA authorization (AMF, BaFin, etc.) and the whitepaper must be approved, not just notified.

Key distinction: EMT ≈ electronic money (like a digital euro). ART ≈ investment-like stability tool.

If a token combines features, MiCA does not recognize a hybrid category — regulators apply the strictest classification.

The Howey Test is the US Supreme Court test (1946, SEC v. W.J. Howey Co.) used to determine if something qualifies as a security.

4 cumulative criteria — ALL must be met:

1. Investment of money (or other consideration)
2. In a common enterprise (investors' fates linked)
3. With expectation of profit
4. From the efforts of others (primarily a team/promoter, not the investor themselves)

If any one prong fails → not a security.

Post-Ripple (July 2023): Judge Torres ruled that XRP sold on exchanges to retail buyers (programmatic sales) are NOT securities, but Ripple's direct sales to institutional buyers ARE. This introduced context-dependency: the same token can be a security in one transaction, not in another.

See the "Is my token a security?" diagnostic for a guided walkthrough.

You need a CASP licence if you serve or target EU users AND you provide one of these 10 crypto-asset services under MiCA:

• Custody & administration (Art. 75, €350K capital)
• Operating a trading platform (Art. 76, €150K)
• Exchange crypto/fiat or crypto/crypto (Art. 76-78, €125K)
• Placement of crypto-assets (Art. 79, €50K)
• Reception/transmission of orders (Art. 80, €50K)
• Execution of orders (Art. 81, €125K)
• Transfer services (Art. 82, €50K)
• Portfolio management (Art. 83, €50K)
• Advice on crypto-assets (Art. 83, €50K)
• Crypto-asset on behalf of clients (Art. 84, €50K)

Exemption: if your protocol is fully decentralized with no identifiable operator (MiCA Recital 22), you may escape CASP — but the bar is high. Front-end DApps with admin keys or fee collectors are typically captured.

A CASP licence passports across all 27 EU states. Timeline 12–18 months.

Run the "Do I need a CASP licence?" diagnostic for a verdict on your setup.

The fastest paths to a crypto licence globally:

1. Liechtenstein TVTG — 3 to 9 months. CHF 15–80K capital. 14 service-provider types. Bonus: EEA passport into all 27 EU states.
2. Switzerland FINMA / VQF-SRO — 6 to 12 months for SRO membership (AML framework).
3. Dubai VARA — 6 to 12 months. Modern rulebook, single regulator, zero income tax.
4. Singapore MAS PSA — 6 to 12 months for SPI or MPI.

Compare that to EU MiCA (12-18 months, €50-350K capital) or US state-by-state MTLs (18-36 months, $500K-$2M+).

If speed is your top priority, Liechtenstein + EEA passport is usually the best combo: get live quickly, then access the full EU market.

The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) was signed into law in July 2025. It creates the first federal framework for USD-denominated payment stablecoins.

Key provisions:

• Federal OCC Payment Stablecoin Issuer charter (dual path with state-qualified issuers)
• 1:1 reserves in cash + short-term US Treasuries (<93 days) + repos
• Monthly CFO-signed disclosures + annual independent attestations
• T+1 redemption at par
• Bank-grade AML/KYC + OFAC screening
• No interest/yield payments to holders
• Bankruptcy-remote segregation of reserves
• Foreign issuers may passport if regime is comparable (reciprocity)

Practical impact: if you issue a USD stablecoin to US users, you now have a clear federal path (vs the pre-2025 patchwork of state MTLs + NY BitLicense).

Paired with the CLARITY Act (SEC/CFTC jurisdiction split), this is the biggest US crypto regulatory overhaul since the 2010s.

Short answer: it depends on the transaction.

Judge Torres ruled in July 2023 (SEC v. Ripple):

• ✅ Programmatic sales on exchanges to retail buyers → NOT securities (prongs 2 & 4 of Howey failed: buyers had no direct relationship with Ripple and no reasonable expectation that Ripple's efforts specifically would drive their returns).
• ❌ Institutional sales by Ripple under written contracts to hedge funds → ARE securities (all 4 Howey prongs satisfied).
• Other distributions (employee compensation, developer grants) → not sales of money → not securities.

Impact: US exchanges (Coinbase, Kraken, Gemini) relisted XRP within weeks. Under the CLARITY Act 2025, XRP now qualifies as a "digital commodity" — under CFTC jurisdiction rather than SEC for secondary-market trading.

Other jurisdictions:

• 🇪🇺 EU (MiCA): crypto-asset, neither EMT nor ART → trading requires CASP
• 🇸🇬 Singapore (MAS): Digital Payment Token (DPT)
• 🇬🇧 UK (FCA): unregulated cryptoasset

The TVTG (Token- und VT-Dienstleistergesetz) is Liechtenstein's Token and Trusted Technology Service Providers Act, adopted in 2020. It is one of the most comprehensive token frameworks in the world.

What makes it special:

• Defines 14 types of service providers (Token Issuer, Custodian, Exchanger, Identity Service Provider, Physical Validator, etc.)
• Uses the "Token Container Model" — a token is a "container" that can represent any right or asset
• Timeline: 3 to 9 months to obtain an SP licence
• Capital: CHF 15K to 80K depending on the SP type
• EEA passporting — a Liechtenstein-licensed provider can market into all 27 EU member states

Typical use: fast track for crypto startups that want to launch in Europe. Get authorized in Liechtenstein quickly, then passport into the broader EU market while gradually pursuing a full MiCA CASP if desired.

Regulator: FMA (Finanzmarktaufsicht Liechtenstein).

Regulatory implications:

• TradFi: fully covered by existing banking/securities/insurance regulation.
• CeFi: requires licences everywhere (CASP/VASP/MSB/MTL). Liable for AML/KYC on its users.
• DeFi: MiCA Recital 22 exempts fully decentralized protocols (no operator), but most "DeFi" deployments have admin keys or fee collectors → captured as CASP. Truly permissionless protocols are rare.

The Travel Rule is FATF Recommendation 16, requiring Virtual Asset Service Providers (VASPs/CASPs) to exchange originator and beneficiary information on crypto transfers.

Required data:

• Originator: name, account number, physical address (or national ID / date & place of birth)
• Beneficiary: name, account number

Thresholds:

• 🇪🇺 EU (MiCA): >€1K (effectively all transfers for unhosted wallets)
• 🇺🇸 US (FinCEN): >$3K
• 🌍 FATF baseline: >$1K / €1K

Why it exists: the Travel Rule extends to crypto the information-exchange rules already in place for traditional bank wires (SWIFT) to combat money laundering and terrorist financing.

Practical impact: CASPs must integrate a Travel Rule compliance solution (Sumsub, Notabene, TRUST network, Shyft, etc.) to exchange this data with counterparty VASPs on every cross-border transfer above threshold.

On XRPL, custody depends on who controls the signing keys.

Custodial — 🔴 requires CASP Art. 75 MiCA (EU) or MSB + State MTL (US):

• Single Key — service holds the master key
• IOU / Trust Lines (gateway) — service holds off-chain assets (e.g. RLUSD)

Non-custodial — 🟢 no licence for the custody itself:

• Escrow — time-locked or condition-based, ledger-enforced
• Payment Channels — off-ledger with on-chain settlement
• Checks — deferred payment, sender can always cancel
• NFT Broker mode (XLS-20) — atomic swap, broker never holds the NFT
• SignerList minority — multisig where service holds fewer keys than quorum requires

Grey zone — 🟡 legal opinion required:

• Regular Key — secondary key; depends on whether user retains master
• SignerList majority — service can reach quorum alone
• MPC / TSS — threshold signatures, ESMA has no definitive position
• MPT (XLS-33) — programmable tokens, issuer can lock or authorize

Design rule: if no single party can sign alone, you have a strong non-custodial argument. The more keys you give the user, the clearer the non-custodial posture.

See the "Is my XRPL custody custodial?" diagnostic for a verdict on your specific architecture.

RLUSD is Ripple's USD-backed stablecoin, launched in December 2024 on both XRPL and Ethereum. It is the reference implementation of a regulated stablecoin on XRPL.

Structure:

• Issued by Standard Custody & Trust Company (a NYDFS-chartered limited-purpose trust)
• Backed 1:1 by cash + short-term US Treasuries
• Qualifies as an EMT under MiCA (issuance to EU users would require an EU EMI)
• On XRPL: uses the native IOU / Trust Line model — users hold RLUSD as on-chain claims against the trust
• On Ethereum: standard ERC-20 with admin controls (pause, blacklist, mint/burn)
• Two independent mints (no bridge)

On-chain compliance features (XRPL):

• RequireAuth — holders must be explicitly authorized by the issuer (on-chain KYC gating)
• freeze — can freeze individual trust lines for AML holds
• globalFreeze — emergency brake for all trust lines

Why it matters: RLUSD proves that "custodial" can be done cleanly with on-chain compliance primitives that ERC-20 stablecoins must retrofit via admin functions. Likely model for future regulated stablecoins on XRPL.