EMI vs CASP: Which License Does Your Business Actually Need? (2026)

1.  The decision is set by activity, not preference. An EMI license authorises fiat payment services. A CASP registration authorises crypto-asset services. Neither substitutes for the other.

2.  If your model touches both fiat and crypto, you need both. Latvia allows a single entity to hold an EMI license and a MiCA-compliant CASP registration, structured concurrently.

3.  Capital is the sharpest divide. EMI requires €350,000 in minimum own funds. CASP requires €50,000, €125,000, or €150,000 depending on class.

4.  CASP is not one authorisation but three classes. Custody and exchange sit in Class II at €125,000, not in the entry-level Class I.

5.  Both authorisations passport. EMI passports under PSD2. A CASP registration passports under Article 65 of MiCA by notification, and services may begin from the 15th calendar day after the notification is submitted.

Most founders arrive at this question having already decided they need European authorisation. What they have not decided, and often cannot decide from the outside, is which authorisation applies to the business they are actually building. The two most common paths into Latvia's regulated market are an Electronic Money Institution license and a Crypto-Asset Service Provider registration. They are frequently discussed as alternatives. They are not alternatives. They authorise different activities, and the activities you intend to perform determine which one you need.

This article sets out the distinction, the capital and fee consequences of each path, and the specific questions that resolve the choice.

EMI vs CASP: the core difference

An EMI license authorises a company to issue e-money and provide fiat payment services across the European Economic Area. A CASP registration authorises crypto-asset services such as custody, exchange, and transfer under the Markets in Crypto-Assets Regulation. They cover different activity sets, are governed by different frameworks, and carry different capital requirements.

Both authorisations are granted by the same regulator, the Bank of Latvia, and both follow the same application process. The difference is in what they permit and what they cost.

For the full detail behind each of these figures, including the service scope for either path, see the complete Latvia EMI and CASP licensing guide.

What an EMI license lets you do

An EMI license permits seven categories of fiat payment activity: issuing e-money and multi-currency wallets, opening IBAN payment accounts, launching branded debit and prepaid cards, acquiring card payments for merchants, facilitating instant money remittance, providing open banking services, and offering white-label banking-as-a-service.

The permitted fiat activities under an EMI license are:

• Issue e-money and multi-currency wallets
• Open IBAN payment accounts
• Launch branded debit and prepaid cards
• Acquire card payments for merchants
• Facilitate instant money remittance
• Provide open banking services (PIS and AIS)
• Offer white-label banking-as-a-service

The practical test is straightforward. If any item on that list sits in your product, now or in the roadmap you are building toward, you need an EMI license. There is no crypto-asset authorisation that covers holding or moving client fiat. A business that intends to give clients an IBAN, issue them a card, or let them send money is performing a payment service, and payment services require payment authorisation regardless of what else the platform does.

This is where the most expensive misreadings happen. A crypto platform that plans to add fiat on-ramps later, and treats that as a feature rather than a licensing event, has built its structure against the wrong requirement.

What a CASP registration lets you do

A CASP registration permits crypto-asset services and is structured into three classes under MiCA. The class determines both the activities authorised and the minimum own funds required, ranging from €50,000 for Class I to €150,000 for Class III.

At the headline level, a CASP registration covers crypto custody and wallet services, exchange between crypto-assets, exchange between fiat and crypto, and token issuance. Underneath that, the authorisation is tiered, and the tier matters more than most founders expect.

Minimum own funds serve as a prudential safeguard. They ensure the licensed entity has sufficient financial stability to operate responsibly, absorb risks, and protect client funds. These funds are ring-fenced, meaning they cannot be freely used for operational expenses but must remain available to meet regulatory and financial obligations. This applies equally to EMI and CASP capital.

Which CASP class fits your model

Class I covers advisory and order-flow businesses that do not hold client assets. Class II covers businesses that take custody of client crypto or exchange it. Class III covers operators of a trading venue. Most custody and exchange businesses require Class II at €125,000, not the entry-level Class I.

Class I, €50,000. You route, advise, or manage, but you do not hold client assets and you do not run the venue. Order execution, placing of crypto-assets, transfer services on behalf of clients, receiving and transmitting orders, advice, and portfolio management all sit here. This is the lightest capital requirement and the narrowest permission set.

Class II, €125,000. You hold client crypto, or you exchange it. Custody and administration on behalf of clients, exchange of crypto-assets for funds, and exchange of crypto-assets for other crypto-assets sit here. Any business describing itself as a wallet provider, a broker with custody, or an exchange service is in this class at minimum.

Class III, €150,000. You operate the venue itself, a trading platform for crypto-assets where third parties transact. This is the widest permission and the highest capital requirement.

The distinction that catches founders is between Class I and Class II, and it turns on custody. Taking control of a client's crypto-assets, even briefly and even as an incidental step in a flow that is otherwise pure order routing, moves the business into Class II and raises the capital requirement by €75,000. Model this precisely before the application is scoped, because the answer changes what you have to fund.

When you need both

A business needs both an EMI license and a CASP registration when its model combines fiat payment services with crypto-asset services. Latvia allows a MiCA-compliant CASP registration to be obtained alongside an EMI license, letting a single entity operate at the intersection of fiat and crypto.

The dual path is the answer for a specific and increasingly common shape of business: one where clients fund an account in fiat, hold or trade crypto, and withdraw in either. That flow crosses both authorisations. The fiat leg is a payment service. The crypto leg is a crypto-asset service. One entity performing both needs permission for both.

Latvia's framework accommodates this directly. A CASP registration can be structured alongside an EMI application rather than pursued as a separate exercise afterwards, which is the more efficient sequencing for businesses that already know both are required. Combining EMI and CASP capabilities under one jurisdiction helps future-proof the business, supports both traditional and digital asset clients, and accelerates entry into Europe's regulated fintech and crypto markets.

There is one narrow exception worth knowing before two applications are scoped. Under Article 60 of MiCA, an authorised electronic money institution may provide custody and administration of crypto-assets and transfer services for crypto-assets without a separate CASP authorisation, but only in relation to the e-money tokens it issues itself. The route is a notification to the competent authority at least 40 working days before those services are provided for the first time, and an institution using it is not subject to the CASP authorisation and own funds articles. It is a genuinely useful exemption for a token issuer and it covers nothing else. Exchange, custody of third-party crypto-assets, and operating a trading platform all fall outside it and require full authorisation.

Beyond that exception, the two capital requirements do not merge. The European Banking Authority addressed this directly in its opinion on the interplay between PSD2 and MiCA, published on 10 June 2025. Prudential requirements apply cumulatively across the two frameworks, with no compensation mechanism and no mutual recognition between them, and the same capital cannot be counted twice. A business holding an EMI license and a Class II CASP registration funds €350,000 and €125,000. It does not fund the higher of the two.

The same opinion settles a point that catches stablecoin businesses from the opposite direction. An e-money token is electronic money, and therefore funds, under PSD2. Custody of e-money tokens and transfers of e-money tokens on behalf of clients are payment services. A CASP handling them needs payment institution or electronic money institution authorisation in addition to its CASP registration, and the transition period the EBA recommended for that ended on 2 March 2026 with no grandfathering for firms that had not applied. A crypto business built around a euro stablecoin is not choosing between the two authorisations. It needs both.

What this means for the capital you raise

Model the two own funds requirements as additive rather than as an either/or. Capital is ring-fenced under both regimes and is not available for operational expenses under either.

Article 67 of MiCA sets the CASP requirement as the higher of the class minimum and one quarter of the preceding year’s fixed overheads. The figure is a floor at authorisation, not a fixed cost, and it rises with the cost base as the business grows.

‍The decision in four questions

Four questions resolve the choice: whether you will handle client fiat, whether you will hold or exchange client crypto, whether you will operate a trading venue, and whether your activity is limited to advice and order flow. The answers map directly onto EMI, CASP Class II, CASP Class III, and CASP Class I respectively.

1. Will you hold or move client fiat. If you will issue e-money, open IBAN accounts, issue or acquire cards, or facilitate remittance, you need an EMI license. This question is answered first because it is the only one where no crypto authorisation is an alternative.

2. Will you hold client crypto, or exchange it. If you will take custody of crypto-assets on behalf of clients, exchange crypto for fiat, or exchange crypto for crypto, you need CASP Class II at minimum.

3. Will you operate the venue where third parties trade. If you will run a trading platform for crypto-assets, you need CASP Class III.

4. Is your activity limited to advice and order flow. If you will only execute or transmit orders, place crypto-assets, provide transfer services, advise, or manage portfolios, without holding or exchanging client assets, CASP Class I may be sufficient.

If you answered yes to the first question and yes to any of the others, you are in dual-license territory and should scope both applications together. If you answered yes only to the first, EMI alone is the path. If you answered no to the first, you are on a CASP-only path and the remaining questions set your class.

Answer these against the business you are building toward, not the version you are launching. Licensing scope is expensive to widen after the fact, and the sequence in which structure, licensing, and banking decisions are made determines the cost and speed of everything downstream.

Regulatory costs compared

Each path carries three regulatory costs: ring-fenced minimum own funds, a one-time application fee to the Bank of Latvia, and an annual supervision fee with a fixed and a variable component. EMI is materially more expensive on all three.

Two features of this table are worth reading carefully. The first is that the annual fee is not a flat cost on either path. It scales with revenue, at up to 1.4% of gross EMI income and up to 0.6% of gross crypto revenue, so the supervision burden grows as the business does. The EMI variable component is capped at €100,000 per year. The second is the reduced rate available to EMI holders operating in innovative electronic payments only. Latvijas Banka charges those applicants €450 rather than €5,000 to review the application, and €1,000 per year rather than €7,000 for the first three years from the date the licence is issued. That is a substantial reduction on both fees and worth establishing eligibility for before the application is scoped.

These are regulatory costs payable to the Bank of Latvia and are separate from advisory fees. Fees for the engagement itself are scoped to the specific situation and discussed during the initial consultation.

How long each application takes

The Bank of Latvia works to published deadlines on both paths. An EMI application gets 15 working days for a completeness check, followed by a decision within 3 months. A CASP application gets 25 working days for a completeness check, followed by a decision within 40 working days, matching the deadlines set in Article 63 of MiCA.

Both clocks start on confirmed completeness, not on submission. That distinction is where most timeline expectations break down. An incomplete file is returned with a deadline for the missing information rather than assessed as it stands, so a rushed submission does not buy time. It spends it.

The practical consequence is that preparation governs the timeline more than the review period does. Neither published deadline includes the work that precedes submission: incorporating the entity, assembling the compliance documentation package, sourcing the compliance staff the application has to name, and funding the own funds requirement. That is the part of the process where months are won or lost, and it is the part a readiness assessment is designed to compress.

Treat the statutory period as a floor rather than a forecast, and scope the preparation against the business you intend to run at the point the licence is granted.

What the choice does not depend on

The choice between EMI and CASP is determined by the activities a business intends to perform, as defined in the permitted activity lists for each authorisation. It is not determined by company size, funding stage, or a preference for the lower capital requirement.

The most common error is to work backwards from the capital available. A founder with €150,000 to commit reads the CASP class table, finds a tier that fits the budget, and scopes the application to match. That approach produces an authorisation that does not cover the business. The permitted activity lists are not a menu to select from according to means. They are a description of what each authorisation legally permits, and performing an activity outside your permission is a supervisory problem, not a commercial one.

The correct sequence runs the other way. Define the activities, identify the authorisation those activities require, and then confront the capital requirement that follows. If the resulting figure is out of reach, the answer is to narrow the business model deliberately, not to under-scope the license and hope the gap goes unnoticed.

It is also worth noting that this decision sits inside a wider one. Latvia is one of several routes into regulated markets, and the same activities carry different capital, fee, and timeline profiles elsewhere. Where Latvia sits against the alternatives is covered separately in our comparison of crypto licensing jurisdictions.

Does the engagement differ between the two paths?

No. The same service scope applies to both EMI and CASP applications: corporate setup, incorporation, compliance documentation, compliance staff sourcing, software introductions, and Bank of Latvia application handling. What differs is the capital requirement and the state fee profile, not the work involved.

Fees are scoped to the specific engagement and discussed during the initial consultation. Legal fees exclude application fees payable to the regulator or other authorities, costs originating at third-party service providers, and share capital or other forms of prudential capital.

The practical implication is that the decision between EMI and CASP is not a decision about how much advisory work is involved. It is a decision about which permission the business needs and what capital that permission requires.

Frequently asked questions

What is the difference between an EMI license and a CASP registration?

An EMI license authorises fiat payment services: issuing e-money, opening IBAN payment accounts, card issuing and acquiring, and money remittance. A CASP registration authorises crypto-asset services: custody, exchange, transfer, and related activities. The two cover different activity sets and are not substitutes for one another.

Do I need both an EMI license and a CASP registration?

You need both if your model combines fiat payment services with crypto-asset services, for example letting clients fund an account by bank transfer and then trade crypto. Latvia allows a MiCA-compliant CASP registration to be obtained alongside an EMI license under one entity.

Do I need an EMI license to handle stablecoins?

If you hold or transfer e-money tokens for clients, yes. E-money tokens are funds under PSD2, so custody and transfers of them are payment services requiring payment institution or EMI authorisation alongside a CASP registration. The transition period for this ended on 2 March 2026.

Which CASP class does a crypto exchange need?

Exchanging crypto-assets for funds or for other crypto-assets falls under CASP Class II, which requires €125,000 in minimum own funds. Custody and administration of client crypto-assets sits in the same class. Operating a trading platform where third parties trade with each other falls under Class III, at €150,000.

How much share capital does an EMI license require compared to a CASP registration?

An EMI license requires €350,000 in minimum own funds. A CASP registration requires €50,000 for Class I, €125,000 for Class II, or €150,000 for Class III. In both cases the capital is ring-fenced and cannot be used for operational expenses.

Is a CASP registration cheaper than an EMI license?

On regulatory cost, yes. CASP carries a €2,500 application fee against €5,000 for EMI, an annual fee starting at €3,000 against €7,000, and lower minimum own funds. But cost is the wrong basis for the decision. The permitted activities determine which authorisation you need.

Does the engagement scope differ between an EMI and a CASP application?

No. The same scope applies to both: corporate setup, incorporation, compliance documentation, compliance staff sourcing, software introductions, and Bank of Latvia application handling. What differs between the two paths is the capital requirement and the state fee profile, not the work involved.

Can a CASP registration be added to an EMI application already in progress?

Yes. A CASP registration can be structured alongside an EMI application rather than pursued separately afterwards, which is the more efficient path for businesses that already know they will operate at the intersection of fiat and crypto. Both applications go to the Bank of Latvia under the same service scope.

Does a CASP registration allow EU passporting like an EMI license?

Yes. Article 65 of MiCA gives an authorised CASP a notification-based passport. You tell the Bank of Latvia which services you intend to provide and in which member states, it transmits that to the host authorities, ESMA and the EBA within 10 working days, and you may begin from the 15th calendar day after submitting the information.

Do the capital requirements add up if I hold both an EMI license and a CASP registration?

Yes. The EBA confirmed in June 2025 that prudential requirements under PSD2 and MiCA apply cumulatively, with no compensation mechanism and no mutual recognition. The same capital cannot be counted twice. An EMI license alongside a Class II CASP registration means funding €350,000 and €125,000, not the higher figure alone.

Which authorisation covers token issuance?

Neither, as a crypto-asset service. Issuance is not one of the ten crypto-asset services MiCA defines, so it sits in no CASP class. Issuing an e-money token requires authorisation as an electronic money institution or a credit institution under Article 48. Asset-referenced tokens require their own separate authorisation.

How long does an EMI or CASP application take in Latvia?

The Bank of Latvia allows 15 working days to confirm an EMI application is complete, then decides within 3 months. For a CASP application it is 25 working days to confirm completeness, then 40 working days to decide. Both clocks start on confirmed completeness, not on submission.

Key resources

Disclaimer

This article is for informational purposes only and does not constitute legal or regulatory advice. Regulatory requirements are subject to change. Consult a qualified advisor before making structural or compliance decisions.

DM Strategy advises fintech and crypto founders on structure, licensing, and banking as one interconnected decision. If you are not certain which authorisation your model requires, that is the question a readiness assessment answers first. Book an introductory call at dmstrategy.io.

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