Dual Licensing Risk for Stablecoin Providers
Stablecoin providers, also known as E-Money Tokens (EMTs) in the European Union, are currently navigating a complex regulatory landscape that risks creating significant compliance burdens. Patrick Hansen, the EU policy lead at Circle, has raised concerns about a potential regulatory crisis. He warned that current guidance from the European Banking Authority (EBA) might compel companies to obtain dual licenses. This would mean securing one license under the Markets in Crypto-Assets (MiCA) regulation and another under the Payment Services Directive (PSD2) for what amounts to the same core activities of custody and transfer.
Contradiction with MiCA's Unified Framework Goal
This regulatory duplication, which was confirmed by the EBA in June 2025, directly contradicts the fundamental objective of MiCA, which was designed to establish a unified and harmonized framework for crypto-assets across the EU. The implications of this overlap are substantial. Companies will be subjected to double capital requirements, potentially reaching up to €250,000, and will incur significantly increased compliance costs. Hansen cautioned that this scenario could undermine the EU's overall competitiveness in the digital asset space and could lead to a drastic slowdown in the adoption of euro-denominated stablecoins, as providers may find the regulatory environment too challenging and opt to exit the market.
Urgent Need for Legislative Action
The industry is facing a critical juncture, with less than five months remaining before the transition period for these regulations concludes. The focus is now squarely on EU lawmakers to take swift and decisive action. Potential solutions include extending the current deadline to allow for more comprehensive regulatory clarity. More importantly, there is a pressing need to amend the upcoming Payment Services Directive (PSD3). Such an amendment would ideally explicitly exempt EMT activities that are already adequately covered under the MiCA framework, thereby preventing the duplication of licensing and compliance obligations.
Important Considerations
The information presented in this article is for informational purposes only and should not be interpreted as investment advice. The cryptocurrency market is highly volatile and may involve significant risks. We recommend conducting your own analysis.