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Stablecoins Under MiCA: When a CASP Authorisation Is Not Enough
At a glance
1. Most fiat-backed stablecoins are e-money tokens under MiCA Title IV, which has applied since 30 June 2024.
2. Only a CRR credit institution or an authorised electronic money institution may issue an e-money token in the Union. MiCA provides no separate issuer authorisation.
3. Holding or transferring e-money tokens for clients is also a payment service under PSD2, so a CASP authorisation alone does not cover it.
4. The EBA transition allowing providers to defer PSD2 authorisation ended on 2 March 2026. Firms without authorisation, a qualifying pending application or a licensed partner must cease the activity and offboard clients.
5. MiCA and PSD2 prudential requirements apply cumulatively with no mutualisation, so the same capital cannot satisfy both frameworks.
Stablecoin businesses are the one part of the crypto market where a single authorisation is rarely sufficient. An e-money token is simultaneously a crypto-asset under MiCA and electronic money under the payments framework, and the two regimes attach different requirements to the same activity. A business can hold a valid MiCA authorisation, operate entirely within its scope, and still be conducting unauthorised payment services.
This is not a technicality that regulators have overlooked. The European Banking Authority addressed it directly, gave the market a transition, and closed that transition on 2 March 2026. What follows sets out where the two regimes meet, which activities fall on which side, and what a stablecoin business needs to hold.
What an e-money token is
An e-money token is a type of crypto-asset that purports to maintain a stable value by referencing the value of one official currency. It is governed by Title IV of MiCA, which has applied since 30 June 2024, six months ahead of the bulk of the regulation. A token referencing a basket of currencies, commodities or other assets is an asset-referenced token under Title III and follows a different regime.
The single-currency test is what determines which regime applies, and it is the first thing to get right. A euro-denominated or dollar-denominated payment stablecoin is an e-money token. A token referencing a basket, an index, or a commodity is not, and the issuance route for it is different.
Who may issue an e-money token
Article 48(1) of MiCA restricts issuance. No person may offer an e-money token to the public in the Union, or seek its admission to trading, unless that person is authorised as a credit institution under the Capital Requirements Regulation or as an electronic money institution under Directive 2009/110/EC.
There is no MiCA authorisation for e-money token issuers. This is the point most commonly misunderstood. A business that intends to issue a stablecoin is not seeking a crypto licence at all. It is seeking an electronic money institution authorisation, with initial capital of EUR 350,000 under Directive 2009/110/EC, and the MiCA requirements attach on top of that rather than in place of it.
The reserve requirements follow from the same logic. Reserves must be fully backed, held with credit institutions or invested in highly liquid financial instruments with minimal market, credit and concentration risk, and segregated from the issuer's own funds. Significant e-money token issuers are subject to additional obligations, including more frequent audit of the reserve.
The second requirement most applicants miss
Because an e-money token is electronic money, services performed on it can be payment services under PSD2 as well as crypto-asset services under MiCA. In a No Action letter issued as an Opinion on 10 June 2025 (EBA/Op/2025/08), the European Banking Authority advised national authorities that custody and administration of e-money tokens, and transfers of e-money tokens on behalf of clients, should be treated as payment services requiring authorisation under PSD2.
The EBA could have gone further. One available reading of the two regimes would have required dual authorisation for all e-money token transactions, immediately, with every PSD2 requirement applying in full from the moment authorisation was granted. The No Action letter deliberately took a narrower position, treating only a subset of crypto-asset services on e-money tokens as payment services, allowing a transition period, and advising a streamlined authorisation process that reuses information already submitted during MiCA authorisation.
The scope is nonetheless wider than most applicants expect, and two clarifications matter.
The combined effect is that a custodial model with any outbound movement of e-money tokens is very likely to involve a payment service, whatever the internal architecture looks like.
What changed on 2 March 2026
The No Action letter ran for nine months, deliberately limited to minimise the period during which unauthorised entities could provide payment services in the EU. By the time it expired, more than one hundred providers had approached national authorities informally or submitted applications for authorisation as payment service providers.
In its Opinion of 12 February 2026 (EBA/OP/2026/01), the EBA set out how national authorities should treat each of three positions once the transition ended.
Providers permitted to continue under the second position were expected to operate under restrictions: ceasing all marketing of e-money token activity qualifying as a payment service, and not providing those services to any new clients. Those restrictions did not apply to providers still covered by a national transitional regime under Article 143(3) of MiCA, which has since expired everywhere.
National authorities were also advised to coordinate between the payments and crypto supervisory functions, including by inserting corresponding restrictions into existing CASP authorisations or referring cases to enforcement.
Capital is cumulative, not the higher of the two
The EBA has been explicit that prudential requirements resulting from the two frameworks apply cumulatively, with no compensation mechanism and no mutual recognition. Capital held to satisfy the MiCA own funds requirement does not also satisfy the PSD2 initial capital requirement.
A Class 2 provider that custodies and transfers e-money tokens therefore holds EUR 125,000 under MiCA and, separately, the applicable PSD2 initial capital, which for execution of payment transactions is a further EUR 125,000. Where the business also issues its own token, electronic money institution authorisation brings the EUR 350,000 figure into the same calculation.
These are regulatory floors rather than the capital a business will actually need. The ongoing MiCA requirement is the higher of the class floor or one quarter of the preceding year's fixed overheads, so a business with meaningful operating costs will hold more than the headline number from its second year onward.
Three structures, and what each one requires
The third route is narrower than it is often described. An electronic money institution cannot use Article 60 to operate as a general crypto-asset service provider. The permission extends to its own issued tokens, and anything beyond that requires authorisation under Article 63 in the ordinary way.
The partnership route in the second model deserves the same care. A provider may act as an agent of an authorised payment service provider, but national authorities have been advised to assess whether the partner itself requires authorisation under Article 59 of MiCA. A partner that solves the PSD2 problem while creating a MiCA problem has moved the exposure rather than removed it.
Frequently asked questions
What is an e-money token under MiCA?
An e-money token is a type of crypto-asset that purports to maintain a stable value by referencing the value of one official currency. Most fiat-backed stablecoins fall into this category, which is governed by Title IV of MiCA and has applied since 30 June 2024.
Who can issue a stablecoin in the EU?
Under Article 48(1) of MiCA, only a CRR credit institution or an electronic money institution authorised under the E-Money Directive may offer an e-money token to the public or seek its admission to trading in the Union. MiCA provides no separate authorisation route for issuers.
Does a CASP authorisation cover e-money token activity?
Not entirely. Custody and administration of e-money tokens and transfers of e-money tokens on behalf of clients are treated as payment services under PSD2. Since 2 March 2026 those activities require payment institution or electronic money institution authorisation, or a licensed partner.
What happened on 2 March 2026?
The transition period in the EBA No Action letter on the PSD2 and MiCA interplay ended. From that date a provider carrying out e-money token activities that qualify as payment services must hold authorisation, have a qualifying pending application, or cease the activity and offboard those clients.
Can MiCA and PSD2 capital requirements be combined?
No. The EBA has confirmed that prudential requirements apply cumulatively with no compensation mechanism and no mutual recognition. A Class 2 provider holding EUR 125,000 in own funds under MiCA does not satisfy its separate PSD2 initial capital requirement with the same funds.
Do transfers between a client's own wallets count?
Yes. The EBA has confirmed that PSD2 makes no exception for payment transactions executed between different payment accounts held by the same user, so first-party transfers of e-money tokens still qualify as payment transactions subject to PSD2 rules.
Does it matter whether a custodial wallet is a payment account?
No. The EBA has stated that execution of transfers involving e-money tokens may qualify as a payment service regardless of whether the custodial wallet qualifies as a payment account. The wallet's classification does not remove the authorisation requirement.
Can we partner with a licensed provider instead of getting authorised?
Yes. A provider may act as an agent of a payment service provider authorised for the relevant services. National authorities have been advised to assess whether the partner itself requires authorisation under Article 59 of MiCA, so the partner's own permissions need checking.
Can an EMI provide crypto-asset services without a CASP authorisation?
Only narrowly. Under Article 60 an electronic money institution may provide custody and administration of crypto-assets and transfer services, but only in respect of the e-money tokens it issues, and only after notifying its home authority at least 40 working days in advance.
What capital does a stablecoin issuer need?
Issuance requires credit institution or electronic money institution status. Initial capital for an EMI under Directive 2009/110/EC is EUR 350,000. Where the same group also holds a CASP authorisation, the MiCA own funds requirement for the relevant class applies in addition.
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. To establish which authorisations your stablecoin model requires before you commit capital, book an introductory call at dmstrategy.io.
