On 10 June 2025, the European Banking Authority (EBA) issued a No Action letter to clarify the interplay between the Markets in Crypto-Assets Regulation (MiCA) and the Payment Services Directive 2 (PSD2) in relation to crypto asset service providers (CASPs) that transact electronic money tokens (EMTs).
Background
The No Action letter follows a request from the European Commission (Commission) in December 2024.
Key points
Key points in the No Action letter include:
- The EBA advises Member State competent authorities (NCAs), for the intervening period of 2-3 years during which PSD2 still applies until the application date of the future Payment Services Regulation (PSR) and the transposition date of the future PSD3, to regard the transfer of crypto assets as a payment service under PSD2 where they entail EMTs and are carried out by the entities on behalf of their clients; to regard the custody and administration of EMTs as a payment service under PSD2; and to regard a custodial wallet as a payment account under the PSD2 where the wallet is held in the name of one or more clients and allows to send and receive EMTs to and from third parties.
- For these services, the No Action letter advises NCAs to require an authorisation under PSD2 through streamlined procedures that make maximum use of information that legal entities have already provided during their CASP authorisation under MiCA. However, NCAs are advised to grant applicants a transition period until 1 March 2026 before the authorisation needs to be held. After that date, NCAs are advised to prevent entities that are not licenced as a payment services provider (PSP) or have not entered into a partnership with a PSP, from providing services related to EMTs that qualify as a payment service. Once authorisation as a PSP is granted (or, for those entities that already hold a PSP license or a partnership with a PSP), the No-Action letter advises NCAs not to prioritise the supervision and enforcement of some PSD2 provisions (for example, safeguarding), while insisting on others (for example, the application of strong customer authentication to the accessing of custodial wallets and the initiation of EMT transfers).
- The ‘exchange of crypto-assets for funds’ and ‘exchange of crypto-assets for other crypto-assets’ as defined in MiCA are not deemed to be payment services and are not subject to the application of PSD2, including its provisions on licencing.
- The EBA advises NCAs not to regard as a payment service cases where CASPs intermediate the purchase of any crypto assets with EMTs and not to enforce the application of PSD2 nor require an authorization under PSD2 in such cases.
For the long term, the No Action letter advises the Commission, Council and European Parliament to use the legislative process of PSD3/PSR to amend the relevant provisions in MiCA or by setting out in the PSD3 and PSR which types of EMTs these two legal texts apply, and how they apply.