Tokenized silver and MiCA: the state on October 30
RWA Signal Insight
InfrastructureThe European Markets in Crypto-Assets Regulation (MiCAR) is forcing a significant shift in how tokenized precious metals are treated within the European Economic Area. Coinbase has announced that it will compulsorily convert Pax Gold (PAXG) holdings for retail customers into USD Coin or other assets by October 30, 2026, due to the token's classification as a crypto-asset under MiCAR. Conversely, Bitpanda’s metal tokens remain unaffected because the provider classifies them as unregulated products outside the scope of MiCAR. This distinction highlights how legal construction, rather than the underlying material, dictates regulatory compliance and investor protections. While MiCAR-compliant assets benefit from mandatory white papers and custody rules, unregulated tokens rely entirely on private contract terms and the solvency of third-party custodians like Brink's. This divergence underscores the critical importance of understanding the legal framework behind tokenized assets, as it directly impacts trading availability, liability, and tax status for European investors. The situation serves as a case study for how institutional regulators prioritize the legal nature of digital claims over the physical assets they represent.
Key points
- Coinbase will convert Pax Gold holdings to USDC for EEA retail users on October 30, 2026.
- Bitpanda metal tokens are excluded from MiCAR, remaining outside the regulation's mandatory disclosure and custody requirements.
- MiCAR classification depends on legal structure, meaning gold-backed tokens can be regulated while other metal tokens are not.
- Unregulated metal tokens lack MiCAR-mandated white papers, complaints procedures, and specific reserve audit requirements.
Background
MiCAR is the European Union's comprehensive regulatory framework designed to govern crypto-assets, stablecoins, and their issuers. It categorizes digital assets into specific groups—such as Asset-Referenced Tokens (ARTs) or E-Money Tokens—to enforce strict standards on transparency, custody, and consumer protection. By requiring authorization for issuers, the regulation aims to mitigate counterparty risks and ensure that digital representations of value are backed by verifiable reserves.