Briefing
The European Banking Authority (EBA) has confirmed a critical regulatory overlap between the Markets in Crypto-Assets (MiCA) framework and the Payment Services Directive (PSD2), compelling Crypto Asset Service Providers (CASPs) that custody or transfer e-money tokens (EMTs) to secure dual licenses. This interpretation introduces significant architectural friction, effectively requiring firms to comply with two separate supervisory regimes, which doubles the requisite capital and compliance expenditure for stablecoin services within the European Union. The immediate strategic pressure point is the expiration of the EBA’s transition period on March 2, 2026 , after which dual licensing enforcement will commence.
Context
Prior to this clarification, the industry operated under the assumption that MiCA, as the specialized digital asset regulation, would supersede or explicitly carve out stablecoin-related payment activities from the general Payment Services Directive. This ambiguity created a compliance planning challenge, as firms were uncertain whether MiCA’s robust authorization process, which includes stringent prudential and safeguarding standards for e-money tokens, was sufficient to cover the entire operational lifecycle of the stablecoin service. The resulting lack of clear jurisdictional separation risked undermining MiCA’s core principle of a unified EU “passporting” system for digital asset services.
Analysis
This ruling fundamentally alters the operational compliance framework for CASPs, forcing an immediate restructuring of internal control systems and capital allocation. The requirement for a separate PSD2 payment institution license, in addition to the MiCA CASP authorization, mandates the implementation of parallel fraud reporting and authentication protocols, creating systemic duplication. This dual burden is a direct cause of increased cost, which will likely result in service providers either exiting the EU market or reducing their euro-pegged stablecoin offerings.
The effect is a significant competitive disadvantage for EU-based stablecoin firms compared to those in jurisdictions with a single, unified regulatory standard. This regulatory duplication contradicts the EU’s goal of proportionality and regulatory clarity for the digital asset sector.
Parameters
- Regulatory Conflict Source → MiCA and Payment Services Directive (PSD2)
- Affected Activity → Custody and transfer of MiCA-regulated e-money tokens (EMTs)
- Compliance Deadline → March 2, 2026 (End of EBA transition period before dual licensing is enforced)
- Compliance Cost Impact → Dual licensing and compliance with two supervisory regimes
Outlook
The immediate next phase involves intense industry lobbying for a legislative fix, primarily through amendments to the upcoming Payment Services Directive 3 (PSD3) or a direct revision of MiCA to introduce a clear exemption. Failure to achieve legislative alignment before the March 2026 deadline risks a “regulatory own goal,” potentially stalling the growth of the euro-pegged stablecoin market and driving innovation toward more accommodating jurisdictions. The precedent set is that specialized digital asset laws do not automatically override existing financial services directives, requiring firms to meticulously audit all legacy financial regulations for potential overlaps.
Verdict
The confirmation of MiCA-PSD2 dual licensing establishes an uncompetitive, fragmented compliance architecture that demands immediate legislative intervention to secure the long-term viability of regulated euro stablecoins.
