EU Stablecoin Firms Could Face Double Licensing: Adoption at Risk?

TLDR:

• EU stablecoin firms may face dual licences under MiCA and PSD2 starting March 2026.
• CASPs could retreat from custody services if regulatory overlap is not addressed in time.
• PSD3 legislation may need targeted carve-outs to avoid stalling euro stablecoin growth.
• Regulatory duplication risks creating compliance bottlenecks for crypto businesses in Europe.
  

The EU risks creating a major regulatory bottleneck for its stablecoin market just months before MiCA rules fully kick in. 

Crypto firms handling euro-backed stablecoins could face overlapping licensing obligations. This arises as MiCA and PSD2 frameworks remain misaligned. Experts warn the clash may slow adoption and push users toward unbacked crypto assets.

Patrick Hansen, a crypto policy analyst, highlighted the issue in a recent tweet, drawing attention to the urgent need for legislative fixes.

Europe’s digital currency ambitions may face a compliance hurdle. Currently, businesses using e-money tokens (EMTs) might require both a MiCA CASP licence and a PSD2 payment licence. This duplication could start in March 2026. 

Hansen said that dual licensing contradicts MiCA’s “one rulebook” promise and risks overcomplicating supervision. Firms could struggle to comply, adding legal and operational burdens.

MiCA and PSD2 Overlap Threatens Stablecoin Growth

The European Banking Authority (EBA) guidance points to regulatory duplication as a pressing problem. Firms may have to secure two licences for the same custody or transfer activity. 

Analysts warn this could deter CASPs from offering key stablecoin services. If the main distributors retreat, euro stablecoin adoption may stall. Hansen emphasized that this could unintentionally favor unbacked crypto assets over regulated options.

EU principles such as proportionality, legal clarity, and consistency are also at risk. Forcing dual licences adds unnecessary hurdles for both industry players and regulators.

 Policy documents, including the Commission’s red-tape agenda, call for streamlining rules rather than stacking them. Without intervention, this overlap could create confusion and slow growth. The market could face delays in rolling out euro-backed stablecoin services.

Proposed Fixes and Policy Recommendations

Experts suggest extending the CASP transition period to at least 2027. This would prevent a cliff-edge when dual licensing starts in March 2026. 

Hansen recommends that PSD3 legislation include carve-outs, such as treating first-party EMT transfers differently. Cross-references between MiCA and PSD2 could clarify which framework applies. This would preserve MiCA’s intent while avoiding regulatory duplication.

Industry stakeholders are watching developments closely. Crypto firms need clear guidance to continue offering custody and transfer services. EU policymakers must act fast to maintain competitiveness in the euro stablecoin space. 

Hansen warns that failure to address these overlaps could result in slower adoption and market uncertainty. The coming months will be critical for Europe’s digital finance plans.

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