knowledge 5 August 2025 |

EBA’s No Action Letter on interplay between PSD and MiCA

Crypto-asset service providers (“CASPs”) entering the EU market have been faced with legal uncertainties as to which regulatory authorisation requirements apply to them, particular when dealing with electronic money tokens (“EMTs”). The European Banking Authority (“EBA”) has addressed this by issuing a letter clarifying the interplay between:

• Regulation (EU) 2023/1114 on markets in crypto-assets (“MiCA”); and
• Directive (EU) 2015/2366 on payment services in the internal market (“PSD2”)

(the “No Action Letter”).¹ The Central Bank of Ireland (the “Central Bank”) has indicated that it will adopt all of the recommendations in the No Action Letter.²

Do CASPs offering EMTs need authorisation under PSD2?

The EBA has clarified that CASPs:

• exchanging crypto-assets for funds or other crypto-assets; and/or
• intermediating the purchase of any crypto-assets with EMTs

should not be considered to be providing payment services for which a licence would be required under PSD2.

However, the following should be treated as a payment service for which a licence under PSD2 is required:

• the transfer of crypto-assets when these transactions involve EMTs and are offered and carried out by entities on behalf of their clients; and
• the custody and administration of EMTs which enable the sending and receipt of EMTs to and from third parties.

In addition, the No Action Letter provides that a custodial wallet should be regarded as a payment account under PSD2 if it enables the sending and receipt of EMTs to and from third parties.

The EBA recommends that national competent authorities, including the Central Bank, should apply a transition period until 1 March 2026 before authorisations to carry out the above activities need to be held (the “2026 Transition Period”). After that date, CASPs should:

• hold a payment service provider (“PSP”) licence; or
• enter into a partnership with a licenced PSP; or
• not provide EMT-related services that fall within the scope of payment services.

The Central Bank notes that it has no discretion to extend this deadline.³

Streamlined authorisation

The Central Bank has confirmed that, with respect to CASPs applying for a payment institution authorisation:

• it will seek to minimise the burden on firms during the application process to the fullest extent possible, conscious of the transition period of 31 December 2025 for virtual asset service providers (VASPs) to gain CASP authorisation;
• the payment institution authorisation process will rely to a large extent on the information submitted by the applicant as part of its CASP authorisation and will take full account of the assessment work already performed by the CASP authorisations team;⁴ and
•  it has developed a specific shorter-form application form which can be made available to applicants on request.⁵

Regulatory priorities

In light of the No Action Letter, with respect to a CASP that obtains authorisation as a PSP or enters into partnership with a PSP prior to the end of the 2026 Transition Period, we expect the Central Bank:

• will not prioritise the supervision and enforcement of PSD2 requirements relating to safeguarding, the disclosure of information to consumers pertaining to the level of applicable charges, the maximum execution time of payment transactions, and the unique identifier (e.g. IBAN) and open banking;
• will not prioritise the supervision and enforcement of the provisions of Directive 2014/92/EU (the Payment Accounts Directive) in relation to custodial wallets; and
• will require compliance with key PSD2 requirements such as:
  • applying strong customer authentication requirements when clients access custodial wallets that qualify as payment accounts and when initiating EMT transfers;
  • reporting payment fraud; and
  • requiring the calculation of own funds to be performed cumulatively, reflecting both PSD2 and MiCA requirements.

Conclusion

The No Action Letter seeks to minimise the number of EMT transactions classified as payment services under PSD2 and thus reduce the need for PSD2 authorisation until PSD3 and the new Payment Services Regulation come into effect.

McCann Fitzgerald LLP is a premier law firm in Ireland and advises on the full range of legal, tax and compliance activities undertaken by payment institutions, electronic money institutions and CASPs in Ireland. We have substantial experience in successfully guiding applicants through the regulatory authorisation processes and in helping them to comply with their legal obligations, once established. If you are considering setting up a CASP in Ireland that is impacted by the EBA’s No Action Letter, please contact us for further information as to how we can help.