MiCA regulation for Electronic Money Token (EMT)

The Markets in Cryptoassets Regulation (MiCA) represents an important step in the regulation of cryptoassets in the European Union (EU). Among the key aspects of MiCA are its provisions relating to electronic money tokens (EMTs). Electronic monetary tokens are a type of stablecoin linked to the value of official currencies (fiat currencies) such as the euro or the US dollar. Their main purpose is to provide value stability in the cryptoasset world.

According to MiCA, EMTs are digital assets intended for use as a means of payment and denominated in the value of an official currency. The main characteristic of EMTs is their stability, which is ensured by their peg to the exchange rate of a particular currency. MiCA categorises EMTs as a type of stablecoin, along with asset-backed tokens (ARTs). Regulatory attention to EMTs is due to their potential for use in mass payment systems and their significant impact on financial stability.

MiCA imposes strict requirements on companies issuing electronic cash tokens. EMT issuers are required to obtain a licence to carry out their activities. This involves registering with the supervisory authorities of an EU Member State and meeting minimum capital and operational requirements. Issuers are required to provide reserves equivalent to the value of tokens issued. Reserves must be held in highly liquid assets, such as deposits with EU banks or government bonds with minimal credit risk. EMT issuers should provide users with full and transparent information on the mechanism of tokenisation, how reserves are secured and potential risks. The main tool is a white paper, which is subject to mandatory approval by the regulator. MiCA prescribes measures to protect the rights of EMT holders. This includes the right to redeem tokens in fiat currency at any time and access to remedies in the event of issuer default.

MiCA enshrines the right of national regulators and the European Securities and Markets Authority (ESMA) to supervise EMT issuers. This includes monitoring compliance with reserve requirements, controlling disclosure of information, applying sanctions for violations, including suspension of token issuance or revocation of licences.

The adoption of MiCA and the establishment of clear rules for EMTs aim to achieve the following objectives. Regulatory measures ensure user confidence in EMTs by increasing transparency and minimising operational risks. Clear reserve requirements and issuer oversight reduce the risks of systemic misconduct. MiCA promotes the development of the cryptoasset ecosystem by providing legal certainty and incentivising the adoption of new financial technologies.

Despite its many benefits, EMT regulation faces a number of challenges. For small and medium-sized issuers, it may be economically difficult to comply with strict regulatory standards. The introduction of stringent regulations in the EU could lead issuers to migrate to more leniently regulated jurisdictions. The rapidly changing nature of the crypto industry may make regulations less relevant by the time they are fully implemented.

The MiCA Regulation establishes a foundation for the regulation of electronic money tokens, creating a safe and predictable legal environment for market participants. Despite the existing challenges, MiCA opens new opportunities for the development of cryptocurrency payments in the EU and building user confidence. EMT issuers complying with the new regulation will be able to benefit from legal certainty, strengthening their market position and contributing to the long-term development of the digital economy.

What is Electronic Money Token (EMT)?

Electronic Money Tokens (EMTs) are a form of digital assets that are electronic money issued and regulated under payment services and electronic money legislation. EMTs provide access to stable and liquid funds backed by a fiat currency such as the euro, dollar or other national currency.

These tokens are pegged to the value of traditional currency at a 1:1 ratio, which ensures their stability. EMT issuers are subject to strict regulatory requirements, making them a trusted instrument. Issuance is only by licensed institutions and the use of blockchain technology ensures transparency, security and efficient transactions.

The advantages of EMTs include their stability, availability for instant cross-border transfers and payments, transparency of transactions thanks to blockchain, and the ability to integrate with the traditional financial system. They are governed by European Union directives and regulations such as the Payment Services Directive (PSD2) and the Cryptoasset Regulation (MiCA). Issuers are required to obtain a licence, maintain reserves in fiat currency equivalent to the volume of EMTs issued, and report to supervisory authorities.

EMTs are used in international transfers, e-commerce, decentralised finance (DeFi) and for payments at physical points of sale. They contribute to the development of the digital economy by combining the advantages of traditional finance and new technologies. The prospects for their development depend on improvements in the regulatory framework, the level of user and business confidence, and further improvements in security, collateralisation and transparency standards.

E-money tokens are an innovative instrument that combines the reliability of traditional money with the advantages of digital technology. They are becoming an important element of the modern financial system, contributing to its digital transformation.

Which countries will be affected by Mica?

With the MiCA Regulation (Markets in Crypto-Assets Regulation) coming into force, the European Union has taken a significant step towards creating a single regulated market for crypto-assets. The new rules will affect all 27 EU member states, each of which is required to implement and adapt MiCA regulations at a national level. However, despite the common framework, the process of implementing MiCA in different states will have its own peculiarities. These differences make choosing the right jurisdiction a key factor for the successful implementation of crypto projects.

The MiCA Regulation will affect all European Union member states, including 27 states that will be required to adapt their national legislation to meet the requirements of the regulation. These countries include:

In addition to EU member states, MiCA can impact European Economic Area (EEA) countries such as Norway, Iceland and Liechtenstein, which often follow EU regulation

MiCA aims to establish harmonised regulation of cryptoassets, including Electronic Money Tokens (EMT), utility tokens and asset-referenced tokens. However, implementation of the new regulations is left to member states, leading to variability in timing and detail. Some countries, such as Germany and France, already have well-developed cryptocurrency legislation and can adapt more quickly to the new standards. Others, like the Czech Republic and Luxembourg, due to their reputation as crypto-friendly jurisdictions, are also willing to accept projects with minimal barriers. On the contrary, in countries with less developed cryptocurrency infrastructure, such as Bulgaria or Romania, MiCA adaptation may take longer.

Differences in adaptation timeframes relate not only to administrative readiness, but also to tax policy. For example, in Estonia, which has a highly developed digital ecosystem, entrepreneurs may encounter favourable conditions for startups, including incentives and transparent tax regulations. At the same time, countries with more complex tax systems, such as Italy or Spain, may face additional financial barriers to launching crypto projects.

In addition to taxes, licensing and reservation requirements for tokens remain a key factor. For example, for Electronic Money Tokens (EMT), MiCA requirements oblige issuers to provide a clear description of the tokens, ensure an appropriate level of reservation and maintain compliance with transparency standards. In some countries, regulation of financial reserves may be stricter, making it more difficult to obtain a licence.

Another aspect is co-operation with local regulators. Germany, as one of the EU’s leading economies, has a long history with BaFin, which already has competence in digital assets. France, with its Autorité des marchés financiers (AMF), is also showing willingness to implement MiCA. On the other hand, regulators in smaller countries such as Cyprus or Slovenia may take more time to prepare for the new regulation.

MiCA will also affect countries in the European Economic Area (EEA), including Norway, Iceland and Liechtenstein. These states, although not part of the EU, are required to comply with a significant portion of EU regulations. Liechtenstein, for example, is already one of the leaders in cryptoasset regulation thanks to its Blockchain Act, making it an attractive destination for DeFi projects.

For international crypto projects planning to launch under MiCA, understanding the local differences between EU countries becomes critical. Choosing the right jurisdiction will minimise administrative, financial and legal risks, ensuring a smoother licensing and market entry process.

Regulated United Europe (RUE) offers its clients detailed analyses of jurisdictions under MiCA. We take into account the specific legislation, tax incentives, adaptation timeframes and interaction with regulators in each EU country to offer the best solution for your project. With our expertise and in-depth knowledge of the local market, we help clients choose the jurisdiction that best suits their business objectives and minimises legal risks. 

How can Regulated United Europe help with MiCA regulation for Electronic Money Token (EMT)?

With the MiCA Regulation (Markets in Crypto-Assets Regulation), the European Union has established a legal framework for regulating the cryptocurrency market, including Electronic Money Tokens (EMTs). This creates a transparent business environment and safeguards for users, but the process of complying with the new requirements can be complex and require significant effort. Regulated United Europe (RUE) offers professional support at all stages of your EMT project, tailored to the legislative specificities of a particular EU country.

Although MiCA sets a single standard for cryptocurrency regulation in the European Union, adaptation occurs at the level of individual member states. Differences may concern the timing of implementation of MiCA requirements, local licensing peculiarities, national tax regimes, practical implementation of supervision of the rules. Understanding these aspects and choosing the best jurisdiction for your project are key factors for a successful launch.

RUE analyses your business model, development plans and token specifications to determine the most suitable country to register and launch your project. We assess the level of maturity of the local crypto market, the speed of MiCA adaptation in the jurisdiction, the attractiveness of the tax regime, and the loyalty of regulatory authorities to innovation.

An EMT project requires a licence under MiCA. We provide a full range of services: preparation and submission of applications to supervisory authorities, development of internal procedures compliant with MiCA requirements, preparation of transparency and disclosure documents (whitepaper), advising on capital and provisioning requirements.

We conduct a legal audit of your project to make sure it meets all MiCA requirements, including proper tokenisation, protection of user funds, and compliance with data security standards. We also take into account local laws and regulations to avoid legal risks and reduce administrative barriers.

In addition to obtaining a licence, the successful functioning of a project requires compliance with operational standards. RUE helps build risk management processes, organise reporting to regulators, and establish effective internal control systems.

We not only help with the initial integration of MiCA, but also provide legal support services as your business develops. Our experts are ready to update your strategy in accordance with changes in legislation, protect your company’s interests when interacting with regulators, and assist in resolving disputes.

Launching an Electronic Money Token project under MiCA requires a high level of expertise and attention to detail. Regulated United Europe provides you not only legal support, but also strategic guidance to help you overcome the complexities of MiCA adaptation in different jurisdictions of the European Union. By contacting us, you get a reliable partner for the successful launch and development of your crypto project in the EU.