EBA publishes No Action letter on the interplay between Payment Services Directive (PSD2/3) and Markets in Crypto-Assets Regulation (MiCA)

The European Banking Authority (EBA) published today a No Action letter advising the EU Commission, EU Council and EU Parliament to ensure that, in the long term, EU law needs to avoid a dual authorisation under two pieces of EU law for the activity of transacting electronic money tokens (EMTs). While the existing Payment Services Directive 2 (PSD 2) still applies, the letter advises national competent authorities (NCAs) to enforce authorisation of PSD 2 for a specified subset only of crypto asset service providers (CASPs) that transact EMTs, to do so only after a transition period that ends on 2 March 2026, and then to deprioritise specified PSD 2 provisions. The letter assesses the provisions set out in Mi CA and PSD 2 and advises NCAs under PSD 2 to view the transfer of crypto assets as a payment service under PSD 2 where they entail EMTs and are carried out by the entities on behalf of their clients. It sets out provisions to regard the custody and administration of EMTs as a payment service and to regard a custodial wallet as a payment account 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 PSD 2 only from 2 March 2026 onwards and, during the authorisation process, to apply streamlined procedures that make maximum use of information that legal entities provide during their CASP authorisation process. Once an...