Europe will be the first jurisdiction in the world to require that crypto “white papers” – the specialised prospectus documents used by crypto asset issuers – must be prepared in Inline XBRL, ensuring that these pitch documents can be rapidly and effectively assessed.

Using Inline XBRL (in a similar manner to the existing ESEF mandate for financial reporting) means that these disclosures can be easily consumed, compared and analysed by investors, regulators and other users.

The European Securities and Markets Authority (ESMA) released its Final Report on Markets in Crypto Asset Regulation (or “MiCA”) implementation yesterday. ESMA has decided that it will (with some minor modifications) adopt the proposals set out in its previous consultation on the manner in which crypto white papers must be prepared and submitted to supervisors and then released to market participants.

ESMA will prepare a taxonomy internally, and will optionally permit the use of a simplified template to construct the Inline XBRL disclosures. It is not anticipated that extension taxonomies will be required or permitted.

We understand that the European Commission is keen to finalise this requirement and the rest of the MiCA regulations as a matter of priority. Given that final approval cannot occur until the new EC has been seated (a somewhat lengthy process following last month’s European elections) we do not expect the relevant taxonomy to be published or the RTS to be finalised before the end of 2024.

Of note for our readers, the MiCA Final Report is accompanied by an expert technical analysis commissioned by ESMA and prepared by the Gartner group that studies data formats for text-based disclosures. The report comes down overwhelmingly in favour of Inline XBRL as the appropriate choice for regulators.

At XBRL International we welcome ESMA’s decision to utilise Inline XBRL for its MiCA regulations. We think their report clearly sets out the advantages of digital reporting for today’s modern financial markets. It also makes the significant point that prospectus-style documents can and should be structured to maximise their utility and impact. Perhaps this is a precedent that other markets (and not just for crypto) will follow in due course.