A clash between MiCA and PSD2 over Electronic Money Tokens (EMTs) is creating a regulatory overlap that could hinder crypto services across the EU. Patrick Hansen, an executive at Circle, warned that this tension risks a “regulatory own goal” as some crypto-asset service providers (CASPs) face dual authorizations and capital requirements. The European Banking Authority (EBA) has issued temporary guidance to ease supervision, but the uncertainty could affect companies, national authorities and users before a legislative fix takes effect.
MiCA, applicable since June 2023 and fully in force since December 2024, classifies EMTs as electronic money, while PSD2 regulates traditional payment services. This dual status places EMTs in a regulatory deadlock, as CASPs that handle transfers or custody of EMTs may need both a CASP license under MiCA and payment institution authorization under PSD2, including initial capital and cumulative own funds requirements.
The EBA considers imposing two frameworks on the same activity “undesirable,” citing overlaps, gaps and inconsistencies that complicate supervision. In response, the EBA has issued a non-action letter and an opinion that provide temporary guidance to national authorities and outline medium-term legislative proposals. Among practical measures, the EBA recommends not requiring the double licensing immediately and allows certain obligations to be deprioritized until 2 March 2026, while keeping Strong Customer Authentication (SCA) and fraud reporting as priorities.
Context and impact (MiCA–PSD2)
The ongoing overlap raises compliance costs and capital needs that may reduce liquidity and investment in new products, while the risk of divergent national interpretations could drive regulatory fragmentation across member states. Providers may be nudged toward self-custody models, potentially shrinking regulated service offerings, and CASPs may retain liability for user losses even when some rules are temporarily deprioritized. Up to 25% of non-EU firms have reportedly fled due to regulatory risk, according to cited data, underscoring the market impact.
The key timeline is the transition up to 2 March 2026 and the negotiations on PSD3/PSR; the outcome of these legislative pieces will determine whether the EU corrects the MiCA–PSD2 clash or maintains barriers that condition the adoption of EMT-based services.
