EU regulatory opinion may limit widespread use of stablecoins for regular transactions within the Union
The European Banking Authority (EBA) has issued an opinion in June 2025, shedding light on the regulatory relationship between stablecoins (electronic money tokens, EMTs) and Europe’s Payment Services Directive 2 (PSD2) in the context of the Markets in Crypto-Assets Regulation (MiCA).
In a move aimed at providing clarity, the EBA has classified EMTs as having a dual status under both MiCA (as crypto-assets) and PSD2 (as funds). This classification creates overlap for crypto-asset service providers (CASPs) dealing in stablecoins, who must comply with both regimes.
To ease the transition, the EBA issues a "No Action Letter" style Opinion providing transitional relief. CASPs offering EMT transfer services can operate solely under their MiCA authorisation until March 1, 2026. After this date, a separate PSD2 authorisation (payment institution licence) will generally be required to continue EMT transfers.
The EBA recommends that national competent authorities (NCAs) streamline PSD2 authorisation procedures for CASPs, using information already collected under MiCA, to avoid duplicative processes. Supervision under PSD2 for stablecoin transfers should focus on key safeguards such as strong customer authentication, fraud reporting, and own funds requirements, while deprioritising less critical PSD2 requirements in this context.
For longer-term clarity and regulatory coherence, the EBA recommends that upcoming legislative reforms (PSD3 and the EU Payment Services Regulation) address and simplify the applicable requirements for EMT transfer services to ensure robust consumer protection without duplicative licensing burdens.
The EBA's stance on stablecoins is significant, as it confirms that they are subject to both MiCA and PSD2, requiring CASPs to eventually obtain a PSD2 payment institution authorisation. However, the EBA provides a transitional period and guidance to avoid regulatory duplication and enable coordinated supervision.
It's important to note that transactions involving the exchange of a cryptocurrency for another cryptocurrency or the use of a stablecoin or other funds to settle a crypto transaction are not considered payments falling under PSD2. The potential for stablecoin holders to control programmability has yet to be fully exploited, including its potential benefits for efficiency in payments.
The EBA's opinion comes at a time when the European Central Bank (ECB) is not supportive of stablecoins, and this regulatory situation could further reduce their growth. The regulatory overlap for mainstream stablecoin transactions with a European component could potentially hamper adoption, with mainstream stablecoin transactions involving a European leg likely to become more expensive due to regulatory overlap.
Despite these challenges, the key advantage of stablecoins, according to some skeptics, is regulatory arbitrage. However, the EBA's guidance aims to address this issue by recommending that upcoming legislative reforms simplify the applicable requirements for EMT transfer services, ensuring a level playing field for all participants in the payments ecosystem.
[1] European Banking Authority (EBA), Opinion on the regulatory relationship between stablecoins and PSD2 in the context of MiCA, June 2025. [3] European Banking Authority (EBA), Press Release: EBA clarifies the regulatory relationship between stablecoins and PSD2 in the context of MiCA, June 2025.
- Stablecoins have a dual status under both the Markets in Crypto-Assets Regulation (MiCA) and the Payment Services Directive 2 (PSD2) as per the European Banking Authority's (EBA) opinion in June 2025.
- The EBA issued a "No Action Letter" style Opinion providing transitional relief, allowing crypto-asset service providers (CASPs) offering EMT transfer services to operate solely under their MiCA authorisation until March 1, 2026.
- The EBA recommends that national competent authorities (NCAs) streamline PSD2 authorisation procedures for CASPs dealing in stablecoins, focusing on key safeguards like strong customer authentication, fraud reporting, and own funds requirements.
- The EBA's stance on stablecoins is significant as it confirms that they are subject to both MiCA and PSD2, requiring CASPs to eventually obtain a PSD2 payment institution authorisation.
- The EBA's guidance aims to address the issue of regulatory arbitrage by recommending that upcoming legislative reforms simplify the applicable requirements for EMT transfer services, ensuring a level playing field for all participants in the payments ecosystem.
