MiCA and PSD2 for stablecoin payments: what EU PSPs and CASPs must decide now

The structural difference between the US and EU regimes is covered in GENIUS Act vs MiCA. That article explains why the EU has two doors. This one is for the firm standing in front of them. It assumes the reader operates in the European Union, holds or moves e-money tokens such as USDC or EURC on behalf of clients, and has to decide what to do about it this year.

Why one activity needs two licences

Three facts stack on top of each other. First, MiCA's rules for e-money tokens have applied since 30 June 2024 and its rules for crypto asset service providers since 30 December 2024. A firm that provides custody or transfer of crypto assets for clients needs a CASP authorisation. Second, MiCA states that an e-money token is deemed to be electronic money. Electronic money is funds for the purposes of PSD2. Third, PSD2 defines executing payment transactions and operating payment accounts as payment services, which require a payment institution or e-money institution authorisation. Put together: holding a client's EURC balance and moving it on instruction is a crypto asset service under MiCA and a payment service under PSD2 at the same time.

The European Commission confirmed this reading. The European Banking Authority responded in June 2025 with a no action letter: national authorities were advised not to prioritise enforcement of the PSD2 requirement against CASPs providing these services until 1 March 2026, to give firms time and to give the co-legislators a chance to fix the overlap in the Payment Services Regulation and PSD3. That date has passed. As of writing, the PSR and PSD3 had not been finally adopted. The overlap is live law.

What the end of the transition means in practice

MiCA's own transition has also closed. Firms providing crypto asset services under national regimes before 30 December 2024 could continue for up to eighteen months, to 1 July 2026, and several member states chose shorter periods. Any firm still operating on a national registration is now outside the perimeter. So the position on 12 September 2026 is simple to state. A firm holding or transferring e-money tokens for EU clients needs a CASP authorisation, or must be an entity MiCA already permits to do so, such as a credit institution. And unless the activity falls outside PSD2's scope, it needs a payment services authorisation too.

Who is caught, and who is not

The trigger is holding or moving client funds. A firm that provides a self hosted wallet interface and never controls the keys is not executing a payment transaction, and is unlikely to be in PSD2 scope, though it may still be a CASP for other services. A firm that runs a hosted account in which clients hold EURC and instruct transfers is squarely in scope. A PSP that accepts EMT pay-ins for merchants and settles them, holding the tokens between receipt and settlement, is in scope for the period it holds them. A firm that only converts tokens to fiat through a licensed partner and never takes possession may be able to rely on the partner's licence. The analysis turns on possession and control, and it should be done transaction flow by transaction flow, not at the level of the business as a whole.

The four paths

Path	What you obtain	Time and cost	Best fit
Own authorisation	Payment institution or e-money institution licence alongside CASP status. Passportable across the EEA	Six to eighteen months. Capital, safeguarding, governance and audit requirements in full	Firms for which holding client balances is the product
Agent of a licensed institution	Registration as an agent under PSD2 Article 19. The principal's licence covers the payment services you deliver on its behalf	Weeks to a few months. Principal's fees and oversight	Firms that need to move fast and can accept the principal's controls
Licensed partner performs the service	No payment licence of your own. A payment institution or e-money institution holds the accounts and executes transfers; you integrate	Weeks. Partner pricing per transaction or per account	Firms whose value is elsewhere, such as software, orchestration or distribution
Restructure out of scope	Redesigned flows in which you never hold or control client funds, for example self custody or immediate pass through	Engineering time. No licence, but a narrower product	Firms that can live without hosted balances

Timings are indicative and vary by member state and by the completeness of the application. Several national authorities have signalled a streamlined process for CASPs seeking PSD2 authorisation where the MiCA application already covers overlapping requirements. Ask the authority before assuming the shorter route is available.

How to choose

The decision reduces to one question: does the firm want to be the account holder of record for its clients' stablecoin balances. If yes, path one is the destination and path two is often the bridge, because agent status lets the firm operate while the application runs. If no, path three or four applies, and the choice between them depends on whether hosted balances are a feature clients will pay for. A firm that says yes to the question but cannot fund the capital and compliance cost of an authorisation should treat that as a business model finding, not a regulatory one.

Which tokens you can use

MiCA also constrains the tokens themselves. Only e-money tokens issued by an authorised issuer may be offered to the public or admitted to trading in the EU. USDC and EURC are issued under MiCA by Circle's French e-money institution. Several euro tokens from banks and e-money institutions are also authorised. Tokens without an authorised issuer were removed from EU trading venues by early 2025 following ESMA's guidance. A payment flow built on a token that is not MiCA compliant is not a licensing question. It is a product that cannot be offered.

What to watch

• The PSR and PSD3. The co-legislators were negotiating in trilogue through 2026. A final text may resolve the overlap by excluding, streamlining or explicitly covering EMT services. Until it is adopted and applies, the current position stands.
• National practice on streamlined authorisation. The EBA recommended it. Whether a given authority offers it, and what it requires, is a national matter.
• Safeguarding of EMT balances. How a payment institution safeguards a client balance held in e-money tokens, rather than in bank deposits, is not fully settled. Expect authorities to ask, and have an answer.

None of these are reasons to wait. They are reasons to design the flow so that the licence path can change without the product changing, which is the same principle that governs one architecture for two regimes. Mapping which flows are in scope, and which path fits, is a two week scoping exercise. It is also the part of the project an unconflicted advisor can do before counsel is engaged, so that counsel's time is spent on the answer rather than on the question.

North Settlements provides business advisory services, not legal advice. This article summarises public regulatory information as of September 2026 in an area where legislation was still moving. Whether a specific flow is in scope of MiCA or PSD2, and which authorisation path is available, depends on the facts and on the member state. Confirm with qualified counsel before filing or restructuring.