In Europe, many Electronic Money Token (EMT) transfers or payments qualify as regulated payment services under PSD2, meaning providers often need separate PSD2 authorization as a Payment Institution, or an Electronic Money Institution, in addition to their MiCA CASP registration if the transactions are via crypto.
In June 2025, the European Banking Authority (EBA) provided Crypto Asset Service Providers (CASPs) with temporary relief from full PSD2 compliance. This temporary relief ended on March 2, 2026 and now the EBA expects stricter regulation of these firms.
If these firms have been approved under PSD2 then no worries. If an application is pending, continuing services may be allowed with restrictions – like no further client onboarding or marketing of these services. The expectation is that the application will soon be approved. And of course, non-compliant or firms that have not submitted an application, they must cease payment services immediately.
Commenting on the transition which now requires regulatory compliance for crypto firms, Julian Sawyer, CEO of Zodia Custody, says Europe is at a turning point as for the past five years institutions have been striving to build digital asset capabilities in house and now regulation may make this model economically unsustainable.
“We are entering the ‘cloud moment’ for digital assets – where institutions move from building proprietary stacks to consuming third-party infrastructure designed to integrate seamlessly into their existing technology stack,” predicts Sawyer. She says their services have experienced accelerated demand from banks and other financial services firms.
“The winners in this next phase of industry maturation won’t be those experimenting at the edges. They will be those deploying institutional-grade infrastructure quickly, safely and at scale.”
The EBA reports that more than more than 100 CASPs have approached regulatory authorities informally or submitted an application for authorisation as payment service providers (PSPs). National competent authorities (NCAs), the member state regulators, have been advised to adhere to the EBA opinion.
With the end of the transition period approaching, and given that application volumes are likely to vary across Member States, the EBA is issuing this Opinion to advise NCAs how to prioritise their authorisation efforts when the transition period ends.