Interplay between MiCAR and PSD2: EBA on the end of the No Action Letter transition period

The interplay between Regulation (EU) 2023/1114 on markets in crypto-assets (“MiCAR”) and Directive (EU) 2015/2366 on payment services in the internal market (“PSD2”) arises from the dual nature of e-money tokens (“EMTs”), which qualify both as crypto-assets pursuant to MiCAR and as electronic money (thus, funds pursuant to PSD2). As a result, as also indicated under recital (90) of MiCAR, “some crypto-asset services […] might overlap with payment services” under PSD2, therefore requiring a dual authorization.

In this regard, the EBA issued on 2 June 2025 the NAL, which:

1. on the one hand, clarified that only a subset of crypto-asset services provided with respect to EMTs may qualify as payment services, i.e. transfer of crypto-asset services, and custody and administration of EMTs, under certain circumstances;
2. on the other hand, advised NCAs to require a dual authorization for CASPs providing or intending to provide the services mentioned under (a) above only after a transition period ending on 2 March 2026 and to apply a streamlined authorization process for those CASPs.

Since the end of the NAL transition period is approaching, the EBA, on 12 February 2026, published a new Opinion for NCAs, outlining three possible scenarios for a CASP wishing to continue to provide crypto-asset services that also qualify as a payment service under PSD2:

1. PSD2 authorization already obtained or partnership with a PSP: CASPs that obtained authorization as a payment institution or electronic money institution, or that partner with a payment service provider (“PSP”) authorized to provide the respective services, may continue operating in line with their PSP authorization, or the authorization of the partner PSP;
2. PSD2 application submitted: CASPs that have submitted an application to provide payment services but have not been authorized (yet) may continue carrying out EMT transactions that qualify as payment services temporarily, provided specific conditions are met (e.g. duly submission of the PSD2 application, absence of significant breaches under MiCAR, a positive NCA preliminary assessment).
   While awaiting the outcome of their authorization process, such CASPs must cease marketing activities related to EMTs that qualify as a payment service and avoid providing any new clients such services;
3. PSD2 application not submitted: CASPs that have not submitted a PSD2 application (or fail to meet the required conditions under point 2. above) must, as of 2 March 2026, cease providing EMT services that qualify as a payment service and offboard relevant clients.

The EBA Opinion is obviously important to providers of services in Europe, but it also represents an interesting comparison for entities looking to provide similar services in the UK (in addition to or instead of the Union).

The UK is not intending to introduce a similar category to EMTs so the cross over between digital asset activities and payments is less clear. At least currently, payment services will be carved out of the UK’s stablecoin and cryptoasset authorisation proposals (link to our article on that here). When that regime goes live firms will not be required to have any payments permissions if their services involve the transfer of stablecoins or other cryptoassets but do not involve any fiat transfers. 

HMT has been clear that this is a position under review, and the intention appears to be to introduce payments regulations to cryptoasset activities as and when they begin to be used at significant levels as means of payment. We are expecting consultations during the course of 2026 on the extent to which the payments regime will apply to cryptoasset transfer services and the point at which such firms may require payments permissions. Until then we have little visibility on how this will look and what activities would bring providers in scope.

However, authorities have suggested that the intention in the UK is to regulate the particular activity rather than the asset and if these proposals follow previous approaches, we would expect it to be possible for firms only providing transfer services in stablecoin to require only payment services permissions and, likewise, for firms that provide only the "quasi- investment" cryptoasset services to not. Obviously, firms providing both sorts of services would require dual licencing (as is currently the case for providers of credit who also provide payment services).

This could result (in the short term at least) in the UK appearing a lighter touch jurisdiction, since a European a provider transferring assets that qualified as EMTs would need authorisation under both a MiCAR and PSD (albeit via a streamlined authorisation process), whilst being able to avoid dual licencing for the same service in the UK.

UK authorities will no doubt be watching the European developments closely and considering the appropriateness of dual licencing regimes and the point at which this would be required. Interested firms should keep an eye out for the next batch of consultation papers to ensure their views are heard on where these lines should be drawn.

Authored by Jeffrey Greenbaum, John Salmon, Elisabetta Zeppieri, Charley Elliott, Charlie Middleton, Andrea Manta, and Giulia Marinai.