On 10 December 2024, in a letter to the European Banking Authority ("EBA") and the European Securities and Markets Authority ("ESMA"), the EU Commission raised certain concerns regarding potential overlap between the second Payment Services Directive ("PSD2)" and the Markets in Crypto-Assets Regulation ("MICA") particularly in the case of services relating to Electronic Money Tokens ("EMTs"). The Commission invited the EBA and ESMA to explore the possibility of issuing an opinion under Article 9c of the EU Regulation establishing the EBA (Regulation (EU) No 1093/2010). These opinions are commonly referred to as "no action letters" and are public statements indicating that the EBA does not intend to recommend enforcement action on specific regulatory issues and advise on whether new legislation or guidelines are needed to address those issues.
On 10 June 2025, the EBA issued such a no action letter on the interplay between PSD2 and MICA (the "No Action Letter") and provided critical guidance for crypto-asset service providers ("CASPs") operating with EMTs. The No Action Letter should also interest other persons offering services in relation to EMTs, who are also not simultaneously authorised to provide payment services pursuant to PSD2, such as investment firms authorised pursuant to the Second Markets in Financial Instruments Directive offering services in crypto-assets. The No Action Letter clarifies service providers' obligations and offers advice to national competent authorities ("NCAs"), during the transition to future payment services legislation, which is forthcoming in the form of the Payment Services Regulation ("PSR") and the Third Payment Services Directive ("PSD3"). It also advises the EU Commission, EU Council and EU Parliament with regard to the future amendment of MICA through the legislative process for PSD3/PSR.
EMTs' Unique Position
EMTs, commonly known as stablecoins, occupy a somewhat unique position under EU law. The No Action Letter confirms that these tokens have a dual nature: they qualify as crypto-assets under MICA and as electronic money under PSD2. This overlap initially raised concerns about regulatory duplication (prompting the 10 December 2024 EU Commission letter), as CASPs feared needing dual authorisation—both as crypto-asset service providers under MICA and as payment service providers under PSD2. The No Action Letter addresses this by advocating for a simplified dual authorisation approach in the short term and aiming to eliminate redundant requirements in the long term. However, until the PSR and PSD3 take effect, CASPs must navigate interim rules that prioritize consumer protection while simultaneously seeking to minimise administrative burdens.
Services Requiring PSD2 Authorisation
The EBA specifies that certain activities involving EMTs fall squarely within PSD2's scope. For example, transferring EMTs on behalf of clients and associated custody services are classified as payment services. CASPs offering these services must apply for PSD2 authorisation unless they elect to partner with persons already authorised pursuant to PSD2. This requirement applies even if the CASP is already authorised under MICA, though the EBA encourages NCAs to streamline applications by leveraging documentation that has already been submitted to NCAs for MICA authorisation purposes.
Notably, the EBA excludes some activities from PSD2 oversight. Exchanging crypto-assets for fiat currency or other crypto-assets, as defined under MICA, does not constitute a payment service. Similarly, facilitating purchases of crypto-assets using EMTs remains outside PSD2's scope. This delineation helps CASPs distinguish between activities that require immediate regulatory action and those that do not.
Compliance Priorities During the Transition
While the EBA advises NCAs to deprioritise certain PSD2 requirements—such as specific safeguarding rules and transaction disclosure mandates—it underscores the importance of enforcing core protections. Strong customer authentication (SCA), fraud monitoring and reporting, and capital adequacy (own funds) requirements remain non-negotiable. This balanced approach ensures that consumers transacting with EMTs receive protections equivalent to those using traditional payment methods, without overwhelming CASPs with additional compliance tasks during the transition.
PSD3/PSR Legislative Process
With regard to the landscape after the introduction of the PSR and PSD3, the EBA's advice to the EU Commission, Council and Parliament is to amend MICA through the legislative process of the forthcoming PSD3/PSR so as to:
- Clarify in MICA that crypto-assets services are only subject to the provisions laid down in MICA, and that this is despite EMTs having a dual nature of being at the same time a crypto-asset and electronic money;
- Clarify that CASPs providing crypto-asset services with EMTs qualifying as payment services need only be authorised and supervised under MICA, and are not required to be authorised under PSD2/PSD3;
- Strengthen the requirements laid down in MICA by applying to crypto-asset services involving EMTs (that effectively qualify as payment services), the provisions set out by Titles III and IV of the PSD2 (or equivalent titles of the forthcoming PSD3/PSR), with the amendments or derogations deemed necessary taking into account the technical specificities of EMTs and of DLT, so that users of such crypto asset services are provided with a level of protection that is adequate and comparable to that of users of payment services.
Strategic Implications for Crypto-Asset Service Providers
For CASPs, the No Action Letter signals a pivotal shift. Firms offering EMT-related services must now:
- Conduct a thorough assessment of whether their activities qualify as payment services under PSD2. This is particularly urgent for businesses handling EMT transfers, custody, or administration.
- Prepare for dual compliance, even if temporary. While the EBA aims to reduce long-term regulatory overlap, the transitional period demands adherence to both MICA and PSD2 frameworks where applicable.
- Leverage streamlined authorisation processes. NCAs are encouraged to fast-track PSD2 applications for MICA-authorised CASPs, reducing duplication in documentation and scrutiny.
- Monitor enforcement priorities. Compliance teams should focus resources on SCA implementation, fraud prevention, and capital requirements, while deprioritising less critical PSD2 obligations during the transitional period.
Conclusion: Proactive Steps for Regulatory Readiness
The EBA's guidance offers much-needed clarity but also imposes urgent obligations. CASPs cannot afford to delay their regulatory assessments; those offering EMT-related services must act now to determine their PSD2 authorisation needs. With the transitional period ending in March 2026, firms have a limited window to align their operations with both MICA and PSD2. By proactively engaging with regulators, leveraging existing compliance frameworks, and prioritising consumer protection measures, CASPs can position themselves as trusted players in the EU's evolving digital finance landscape.
This No Action Letter underscores a broader trend: as crypto-assets integrate into mainstream finance, regulatory alignment is inevitable. Businesses that embrace these changes today will be better equipped to thrive in tomorrow's regulated digital economy.
Originally Published 17 June 2025
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