Which Crypto License Do You Need in the EU: CASP, Payment Institution or EMI?

In the United States, the question is whether a crypto product is money transmission. In the EU it has no single answer, because the activity can fall under three different regimes, and a business can need one, two or all three. Which ones depends on what the product does with crypto, with fiat, and with stablecoins.

This guide explains the three EU licensing regimes, how they overlap, and how the authorization process works. It also highlights the key differences between crypto-asset services, fiat payments, and e-money tokens.

The three regimes at a glance

The capital figures are minimums. They come from Annex IV of MiCA and Article 7 of PSD2, and supervisors can require more.

MiCA: the CASP authorization

MiCA defines ten crypto-asset services: custody and administration on behalf of clients, operating a trading platform, exchange of crypto-assets for funds, exchange for other crypto-assets, execution of orders, placing, reception and transmission of orders, advice, portfolio management, and transfer services for crypto-assets on behalf of clients (Regulation (EU) 2023/1114 (MiCA), Article 3(1)(16), retrieved 2026-10-13).

A person may not provide these services in the Union unless it is an authorized crypto-asset service provider, or one of a list of existing regulated firms allowed to do so under Article 60 (Art. 59(1)). Four points shape the project:

Requirements for CASP authorization

• Substance in the EU. A CASP needs a registered office in a Member State where it carries out part of its services, its place of effective management in the Union, and at least one director resident in the Union (Art. 59(2)).
• Capital by class. Class 1 covers services such as order execution, placing, transfer services, order reception and transmission, advice and portfolio management, at EUR 50,000. Class 2 adds custody, and exchange for funds or for other crypto-assets, at EUR 125,000. Class 3 adds operating a trading platform, at EUR 150,000 (Annex IV).
• A defined process. The authority acknowledges the application within five working days, checks completeness within 25 working days, and, once the application is complete, assesses it and decides within 40 working days (Art. 63).
• A passport. A CASP that wants to serve clients in other Member States notifies its home authority with the list of countries, services and start date (Art. 65).

Notification routes and the MiCA transition

Existing regulated firms have a lighter route. Credit institutions and investment firms can notify at least 40 working days before starting, and a central securities depository can do so for custody and administration only. An e-money institution can notify to provide custody and transfer services only for the e-money tokens it issues (Art. 60).

The transition for firms already operating under national law has ended. MiCA let them continue until 1 July 2026 at the latest, or until they were granted or refused authorization, and Member States could shorten it (Art. 143(3)). Anyone still relying on a pre-MiCA national position should treat that as closed (ESMA’s Markets in Crypto-Assets Regulation (MiCA) overview, retrieved 2026-10-13).

PSD2: the payment institution

MiCA regulates crypto-asset services. It does not regulate moving fiat for customers. That falls under the Payment Services Directive. “Money remittance” is a payment service in which funds are received from a payer, without any payment accounts being created in the name of the payer or the payee, for the sole purpose of transferring the corresponding amount to a payee (Directive (EU) 2015/2366 (PSD2), Article 4(22), retrieved 2026-10-13).

An undertaking that intends to provide payment services must obtain authorization as a payment institution before it starts (Art. 11). A payment institution that provides only money remittance must hold initial capital of at least EUR 20,000 (Art. 7(a)). Like a CASP, an authorized payment institution can provide services in other Member States by notifying its home authority (Art. 28).

For a crypto business, the fiat side is where PSD2 appears: receiving customer euros to fund a purchase, paying out to a bank account, or running a payments product on top of crypto. Often the cleanest answer is to work through a licensed partner for the fiat legs. That is a structural decision, and it belongs at the start.

Where the regimes overlap: e-money tokens

An e-money token (EMT) is a crypto-asset that is deemed to be electronic money. MiCA allows it to be offered to the public only by an issuer authorized as a credit institution or an e-money institution that has published a white paper (Art. 48).

Because an EMT is both a crypto-asset and electronic money, transferring one can qualify as a crypto-asset service under MiCA and a payment service under PSD2. The EBA addressed this overlap in its No-Action Letter (EBA/Op/2025/08, 10 June 2025) and subsequent Opinion (EBA/OP/2026/01, 12 February 2026). Its position can be summarized as follows:

• National authorities should regard the transfer of crypto-assets as a payment service under PSD2 where it involves EMTs and is done for clients, and custody of EMTs likewise. A custodial wallet held in a client’s name that lets the client send and receive EMTs to third parties should be treated as a payment account.
• Exchange of crypto-assets for funds, exchange for other crypto-assets, and intermediating the purchase of crypto-assets with EMTs should not be treated as payment services.
• The transition period under the no-action letter ended on 2 March 2026, so PSD2 authorization is now expected for EMT transfer and custody services.
• The EBA’s stated long-term aim is legislative: avoid dual authorization for transacting EMTs.

The practical result is that a stablecoin payments product may need a CASP authorization and a PSD2 license, while a pure exchange for funds or for other crypto-assets sits under MiCA alone. Which category a product falls in depends on how its flows work, so it needs an analysis of those flows.

The Travel Rule

The EU Travel Rule requires information on originators and beneficiaries to accompany transfers of crypto-assets, where at least one of the providers involved is established in the Union. It applies from 30 December 2024 (Regulation (EU) 2023/1113 (Transfer of Funds Regulation), retrieved 2026-10-13). A CASP’s compliance program has to be built around it from the start.

Choosing a route

There are four common routes, and the right one depends on the product and the timeline.

1. Apply for CASP authorization directly. The right choice when crypto services are the core business and you want your own license and passport.
2. Use an existing license. An e-money institution or a credit institution that is already authorized can extend into crypto services by notification, within the limits above.
3. Combine CASP and payment institution. For products that move EMTs or fiat for clients as part of the service.
4. Partner with a licensed provider. Launching on a partner’s license can shorten the time to market, with the trade-off of dependence on that partner.

Which Member State to apply in is a separate decision. It turns on the supervisor’s experience with your model, the substance you can put in place, banking access, and the timeline.

What we do

We act as lead counsel and run the engagement end to end, coordinating licensing partners in the jurisdictions where a local filing calls for one.

• Regulatory perimeter analysis: which of the three regimes your product falls under, and how the EMT overlap applies to your flows.
• Licensing roadmap and choice of home Member State.
• MiCA application preparation: programme of operations, governance, own funds, policies and the supporting documents.
• AML and KYC framework, including Travel Rule readiness.
• Payments and banking set-up for a licensed business.
• After authorization: passport notifications, regulator correspondence and ongoing compliance.

To scope an engagement we need a description of the product, the flows of funds and assets, the corporate structure and where customers are.

Frequently asked questions

• Does a MiCA license let us run payments?

  Not on its own for fiat. Moving fiat for customers is a payment service under PSD2. For stablecoin transfers, the EBA’s position is that PSD2 applies to EMT transfer and custody services as well.

• Do we need a company in the EU?

  For a CASP, yes. MiCA requires a registered office in a Member State, effective management in the Union and at least one director resident in the Union.

• Can we rely on a US license?

  No. The EU regimes are separate, and a US registration or license does not authorize services in the EU. For the US side, see our guide to money transmitter licensing.

• Is the MiCA transition period still open?

  No. The latest end date was 1 July 2026.

• Which Member State should we choose?

  There is no universal answer. We compare supervisors, substance requirements, banking access and timing against your model before recommending one.

Planning an EU launch?