European Commission writes to EU authorities on the interplay between crypto asset and payment services regulations

The European Banking Authority has published a letter from the European Commission (dated December 6, 2024) to the EBA and the European Securities and Markets Authority regarding the interplay between Markets in Crypto Assets Regulation and the Payment Services Directive. The Commission notes the diverging interpretations among member states about the interplay between MiCAR and PSD2 and asks the EBA, with ESMA, to explore the possibility of issuing a "no action letter" on the enforcement of PSD2 authorization requirements as regards services with electronic money tokens provided by crypto asset service providers (or by entities benefiting from the transitional period under MiCAR) that may be inadvertently caught by PSD2. Where dual authorization would nevertheless be required, the Commission invites the EBA, with ESMA, to explore whether the PSD2 authorization process could be streamlined to reduce the operational burden on institutions. The EBA has responded (in a letter dated December 10, 2024), stating that it agrees with the concerns, and is assessing the issues in co-ordination with ESMA. The EBA aims to publish a response by April 2025.