European Banking Authority Clarifies Stablecoin Dual Licensing under MiCA and PSD2 → Regulation

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Briefing

The European Banking Authority (EBA) has confirmed that the custody and transfer of e-money tokens (EMTs), which are fiat-backed stablecoins under the Markets in Crypto-Assets (MiCA) regulation, also constitute payment services under the Payment Services Directive (PSD2). This interpretation mandates that firms providing these stablecoin services must ultimately secure both a MiCA Crypto-Asset Service Provider (CASP) license and a separate PSD2 payment institution license, effectively doubling the regulatory burden and capital requirements for euro-denominated stablecoin operations in the EU. This dual-licensing requirement takes full effect following the expiration of the EBA’s current transition period on March 2, 2026.

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Context

Prior to this clarification, the industry operated under the assumption that MiCA, as the comprehensive, bespoke framework for digital assets, would supersede or fully incorporate the requirements of existing financial services directives like PSD2 for crypto-native activities. The prevailing compliance challenge was the sheer volume of new MiCA requirements (e.g. reserve management, whitepaper disclosures). However, a fundamental legal ambiguity persisted regarding whether a stablecoin’s transfer should be legally classified as a “payment service,” a category traditionally governed by PSD2, or if the MiCA framework provided sufficient regulatory cover for the entire lifecycle of an EMT.

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Analysis

This EBA clarification fundamentally alters the compliance architecture for stablecoin issuers and service providers, necessitating a full review of operational and capital structuring. Firms must now integrate two distinct compliance frameworks → MiCA’s asset-specific governance and PSD2’s robust consumer protection and operational rules → into a single system, leading to significant duplication of reporting and control mechanisms. The primary consequence is a substantial increase in required regulatory capital, as firms must satisfy the minimum capital requirements for both a CASP and a Payment Institution for the same activity. Failure to secure dual authorization by the deadline will force firms to cease or severely limit their EMT-related custody and transfer services within the EU, threatening market access.

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Parameters

Mandatory Compliance Deadline → March 2, 2026 (The final date after which the EBA’s “no-action” period for dual licensing expires.)
Affected Asset Category → E-Money Tokens (EMTs) (Fiat-backed stablecoins, as defined under MiCA Title IV.)
Required Licenses → MiCA CASP License and PSD2 Payment Institution License (The two distinct authorizations now required for EMT custody and transfer.)
Regulatory Authority → European Banking Authority (EBA) (The body that issued the No Action Letter/Guidance clarifying the dual-licensing requirement.)

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Outlook

The immediate strategic focus for industry advocates will be to lobby for a legislative amendment to either MiCA or the forthcoming PSD3 to eliminate this costly regulatory duplication, potentially by extending the transition period beyond 2026. If the conflict is not resolved, the EU risks stifling the growth of regulated, euro-denominated stablecoins, potentially driving liquidity and innovation to less-regulated offshore jurisdictions. This action sets a critical precedent globally, demonstrating that comprehensive crypto-specific legislation (MiCA) may not automatically override existing, activity-specific financial services law, a lesson that will inform regulatory debates in the US and UK.

The EBA’s dual-licensing requirement for stablecoins establishes a high-cost regulatory floor that prioritizes systemic financial stability over market proportionality, challenging the EU’s competitive position in the global digital asset landscape.

e-money tokens, asset-referenced tokens, stablecoin regulation, MiCA compliance, PSD2 overlap, payment services directive, dual licensing, regulatory fragmentation, capital requirements, crypto asset service providers, EU financial law, banking authority guidance, transition period, operational risk, legal precedent Signal Acquired from → beincrypto.com