E-money vs e-money tokens
- Admin
- Nov 24, 2023
- 1 min read
What's the difference between e-money and e-money tokens in terms of EU law? All electronic money tokens are electronic money, but not all electronic money are electronic money tokens.
Electronic money (abbreviated as 'e-money') is defined in Directive 2009/110/EC, commonly referred to as Electronic Money Directive 2 (EMD2) while e-money tokens are defined in MiCA. MiCA is therefore an addition to requirements already in place.
EMD2 defines e-money as electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions and which is accepted by a natural or legal person other than the electronic money issuer.
MiCA defines e-money tokens as a type of cryptoasset that purports to maintain a stable value by referencing the value of one official currency.
The most important result of those overlapping regimes is that in order to issue e-money tokens, MiCA’s CASP authorisation is not enough and authorisation requirement resulting from EMD2 applies. In consequence, e-money tokens can only be issued by credit institutions and electronic money institutions. Additionally, a notification of a crypto-asset white paper is obligatory.
In case of e-money which is not e-money tokens, MiCA would not apply and rules resulting from EMD2 would be applicable.
