On Wednesday 28th, Adan, together with the Electronic Money Association (EMA), Blockchain for Europe (BC4EU), Crypto Council for Innovation (CCI), the European Blockchain Association (EBA), the European Crypto Initiative (EUCI) and the European Payments Institutions Federation (EPIF) sent a letter to the Directorate-General for Financial Stability, Financial Services and Capital Markets Union (European Commission) and the European Banking Authority (EBA) requesting to clarify the application of the Payment Services Directive (PSD), to fiat-backed stablecoins (electronic money tokens- EMTs- under MICA) and EMT services, anticipated by the MiCA Regulation (MiCA) to apply in June 2024.


Article 48 of MiCA states that EMTs “shall be deemed to be” e-money. As a consequence, EMTs could be regarded as funds under the PSD, and issuers of EMTs and entities providing payment services using EMTs would fall within the scope of the current PSD. 


In light of the above, there remains significant legal uncertainty around the nature of EMTs and the extent of the application of PSD rules to EMTs. In the letter, we request the EU Commission and the EBA to clarify the application of the PSD to EMTs, and to develop further guidance on how PSD rules could be adapted to apply to EMTs and the distributed ledger ecosystem.


The letter also recognizes the difficulties that result from the application of payment provisions which were drafted for typically centralized control over payments IT infrastructure. On the contrary, Crypto Asset Service Providers (CASPs) and issuers providing EMT have limited control over the technical infrastructure, making it impossible to comply with the relevant provisions.

Finally, the letter expresses that the industry is eager to engage with regulators to achieve an effective EU regime for EMT services and stands ready to participate in a joint government-industry working group to achieve regulatory clarity. Legal uncertainty would lead to a significant drop in economic activity around EMTs in the EU and would further inhibit the growth of Euro-denominated EMTs.