Briefing
The European Banking Authority (EBA) has clarified the interaction between the Markets in Crypto-Assets Regulation (MiCA) and the Payment Services Directive (PSD2), confirming that firms providing custody and transfer services for e-money tokens (EMTs) ∞ a category including many stablecoins ∞ must hold both a MiCA Crypto-Asset Service Provider (CASP) license and a separate Payment Institution (PI) license. This interpretation introduces significant regulatory duplication, effectively doubling the compliance and capital requirements for stablecoin issuers and service providers operating in the European Union. This dual-licensing mandate, which must be fully implemented after the transition period, establishes March 2, 2026 , as the critical deadline for firms to secure the requisite payment services authorization.
Context
Prior to this clarification, the digital asset industry operated under a prevailing legal uncertainty regarding the precise jurisdictional overlap between the new, comprehensive MiCA framework and existing EU financial services law, particularly PSD2. MiCA established specific authorization and prudential requirements for EMT issuers and CASPs, but the custody and transfer of EMTs inherently resemble traditional payment services. The lack of explicit exemption for MiCA-licensed entities from PSD2 requirements created a critical ambiguity that hampered strategic planning and product structuring for euro-denominated stablecoins, leading to inconsistent national regulatory interpretations across the single market.
Analysis
This EBA guidance forces an immediate and complex architectural update to the compliance frameworks of all in-scope stablecoin service providers. Firms must now integrate two distinct, capital-intensive licensing processes ∞ one under MiCA for the crypto-asset activity and one under PSD2 for the payment service activity ∞ into their operational structure. This dual requirement fundamentally alters the business model by escalating prudential and governance standards, increasing the cost of compliance, and requiring separate supervisory reporting modules for the same underlying service. The resulting friction risks stalling the adoption and competitiveness of EU-based stablecoins, as providers must now allocate capital and resources to satisfy two full regulatory regimes, a situation that may contravene the EU’s principle of proportionality.
Parameters
- Mandatory Compliance Date ∞ March 2, 2026 ∞ The end of the transition period for national authorities to refrain from enforcing the dual licensing requirement.
- Involved EU Directives ∞ Markets in Crypto-Assets Regulation (MiCA) and Payment Services Directive 2 (PSD2) ∞ The two regulatory frameworks creating the dual-licensing overlap for e-money token services.
- Targeted Digital Asset ∞ E-Money Tokens (EMTs) ∞ The category of stablecoins that, when custodied or transferred, trigger the dual-licensing mandate.
Outlook
The immediate strategic outlook involves intense lobbying by the digital asset industry for legislative remediation, likely through amendments to the forthcoming PSD3 or a specific MiCA Level 2 measure, to eliminate this regulatory duplication. If the dual-licensing mandate remains, it will likely drive market consolidation, favoring well-capitalized traditional finance entities that already hold PI licenses, and potentially pushing smaller or non-EU native stablecoin providers to prioritize other jurisdictions. This action sets a powerful precedent for how EU regulators will interpret the intersection of new digital asset law with established financial services legislation, underscoring the necessity of integrated regulatory technology solutions for cross-sector compliance.
