The legal framework governing the financial sector and digital assets within the European Union has become more structured, establishing clear legal boundaries between traditional payment operations, electronic money, and crypto-assets. Companies intending to provide services in the European Union’s fintech and digital asset markets must select an appropriate licensing model. At present, the most common licences are the MiCA (Markets in Crypto-Assets Regulation), EMI (Electronic Money Institution), and PSP (Payment Service Provider) licences. Each of these licences has its own legal nature, objectives, and scope of application, regulates a distinct segment of financial activity, and entails different levels of obligations and authorisations. Below we outline the key features of each licence.
The MiCA licence (Markets in Crypto-Assets Regulation) arises from Regulation (EU) 2023/1114, adopted with the purpose of harmonising the rules applicable to market participants in the crypto-asset sector. This Regulation establishes a unified legal framework for the regulation of crypto-asset markets. It serves as a necessary legal foundation for the lawful operation of:
- cryptocurrency exchanges (platforms for the purchase, sale, and exchange of crypto-assets);
- brokers (intermediaries between buyers and sellers of crypto-assets);
- token issuers (legal entities or individuals issuing digital tokens for circulation or fundraising purposes);
- custodians (entities providing safekeeping of crypto-assets on behalf of clients);
- stablecoin issuers (entities issuing digital assets whose value is pegged to a fiat currency such as the euro, US dollar, or pound sterling);
- DeFi service providers (decentralised finance platforms offering financial services without intermediaries via smart contracts);
- NFT platforms (digital marketplaces for the creation, purchase, and sale of non-fungible tokens) — provided that they act as a Crypto-Asset Service Provider (CASP);
- other companies offering crypto-related services.
The principal advantage of the MiCA licence is the “passporting” principle, which allows a company licensed in one EU Member State to operate across the entire European Union without the need for additional national authorisations. This significantly simplifies market entry and expansion for such companies.
The EMI licence (Electronic Money Institution) is governed by Directive 2009/110/EC (the E-Money Directive), which regulates institutions issuing electronic money. This licence allows entities to open and manage electronic wallets, conduct transfers, issue payment cards, and carry out other payment operations in fiat currencies (such as the euro, US dollar, or pound sterling). It applies to fintech companies that:
- deal exclusively with fiat currencies (such as the euro, US dollar, or pound sterling);
- provide services involving the issuance of electronic money, the maintenance of e-wallets, and the processing of traditional payment transactions.
Accordingly, EMI licences are directed towards the traditional financial sector and apply solely to fiat-based operations, whereas the MiCA licence governs activities involving crypto-assets.
The PSP licence (Payment Service Provider) is another important regulatory framework, which is based on Directive (EU) 2015/2366 (PSD2) and regulates payment service providers. A PSP licence authorises entities to execute payment operations, receive and transmit payments, and provide information services related to client accounts. PSPs, however, are not permitted to hold client funds on their balance sheets, acting instead as intermediaries between consumers and financial institutions. This model is suitable for businesses engaged in:
- internet acquiring (processing of online card payments for merchants);
- payment gateways (technology platforms ensuring secure data transmission between merchants, banks, and payment systems);
- payment aggregators (services that integrate multiple payment instruments, allowing businesses to accept payments through a unified system).
The choice between MiCA, EMI, and PSP licences depends directly on the business model. A proper selection ensures not only compliance with European Union law but also facilitates the provision of services throughout all EU Member States under a simplified procedure. Companies operating with crypto-assets require a MiCA licence; fintech providers dealing with fiat currencies must obtain an EMI licence; and payment service providers that do not hold client funds should operate under a PSP licence. Each of these authorisations allows cross-border activity across the European Union through the passporting mechanism, enabling a company licensed in one Member State to provide services EU-wide, thereby ensuring a higher level of trust towards regulated financial institutions.
Thus, the modern European system of financial licensing is progressively establishing clear legal boundaries between traditional payment operations, electronic money, and crypto-assets, creating a unified legal environment within which companies may operate in full compliance with European Union standards.
We trust that this overview will be useful to you. Please note that the information provided herein is of a general nature and does not cover all possible legal aspects or risks, which may be further analysed and elaborated in an extended individual consultation. Should you require any additional information or assistance, please do not hesitate to contact us.
Author: Dmytro Dovzhyk, Attorney at Law and Partner at ArtesLex
20.10.2025
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