Moving USDC for clients in the UK and EU: do you need a payments licence as well as a crypto licence?
Does a payment company need a payments licence as well as a crypto licence to move USDC for clients in the UK or EU? In the EU, yes, where it transfers or holds the coin for clients: MiCA Article 48(2) deems e-money tokens such as USDC to be electronic money, and the EBA’s letter of June 2025 treats EMT transfers for clients and EMT custody as PSD2 payment services. Since 2 March 2026 that means a payment institution or e-money institution authorisation, or a partnership with one, on top of CASP authorisation; the exchange of euros for USDC is not itself a payment service, though holding or moving the client’s euros alongside it is. In the UK, as at 26 October 2026, there is no crypto licence, only FCA registration under the Money Laundering Regulations for cryptoasset business carried on in the UK. The UK has no deeming rule; on our reading a third-party coin such as USDC falls outside the Electronic Money Regulations 2011 definition, so only the pound legs sit under the Payment Services Regulations 2017: verify against your coin. From 25 October 2027 the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 bring safeguarding, dealing, arranging and stablecoin issuance under FCA authorisation, with the application window scheduled from 30 September 2026 to 28 February 2027.
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Why one coin needs two authorisations in the EU
MiCA Article 3(1)(7) defines an e-money token as a crypto-asset that purports to maintain a stable value by referencing one official currency, and Article 48(1) lets only an authorised credit institution or electronic money institution issue one (see where to issue a stablecoin). Article 48(2) then deems e-money tokens to be electronic money. EMD2 Article 2(2) defines electronic money as stored monetary value, a claim on the issuer, issued on receipt of funds to make payment transactions, and PSD2 Article 4(25) counts electronic money as funds. Recital 90 admits that custody, placing and transfer services might overlap with PSD2 payment services, and Article 70(4) requires PSD2 authorisation, in-house or through a third party, for related payment services.
The EBA drew the line in its No Action letter of 10 June 2025 (EBA/Op/2025/08): regulators should treat the transfer of EMTs on behalf of clients and the custody and administration of EMTs as PSD2 payment services, and a custodial wallet that can send and receive EMTs from third parties as a payment account. Exchange of crypto-assets for funds or for other crypto-assets is not a payment service. Regulators were to require a PSD2 licence or a licensed-PSP partnership by 2 March 2026 and then stop anyone with neither. The EBA’s opinion of 12 February 2026 (EBA/OP/2026/01) confirmed the date and set the response: a duly submitted, complete payment institution or EMI application, plus the opinion’s other conditions, lets the CASP continue pending the decision; none means cease and offboard as of 2 March 2026.
Article 59(1) lets an electronic money institution provide crypto-asset services through the Article 60 notification route, but Article 60(4) confines that route to custody and transfer services for the e-money tokens the EMI itself issues, on at least 40 working days’ notice. An EMI that moves a third-party coin such as USDC applies for CASP authorisation under Article 63 like any other firm and keeps its EMI licence for the payments leg; a crypto-native firm applies under Article 63 and adds the payment institution licence. The file and the member state are on MiCA authorisation: Infinilex quarterbacks, EU local counsel files.
Sources, read 26 October 2026: MiCA, Articles 3, 48, 59, 60(4), 63, 65, 70(4), 143, Recital 90; EMD2, Article 2(2); PSD2, Articles 4(25), 11(1), 28(1), Annex I; EBA/Op/2025/08 (2 March 2026 per paragraph 18); EBA/OP/2026/01; Council note 8220/26.
Schedule A: activity by activity, EU and UK
| Activity | EU: MiCA service | EU: payments overlay and status | UK now | UK from 25 October 2027 |
|---|---|---|---|---|
| Holding client EMTs (custodial wallet) | Service (a), custody and administration; CASP authorisation (Article 59) | Payment service; the wallet is a payment account (EBA). PI or EMI licence or PSP partnership since 2 March 2026 | MLR registration as a custodian wallet provider; no PSRs 2017 permission for the USDC, which on our reading is not e-money under the EMRs 2011: verify against your coin | FSMA authorisation for safeguarding (RAO article 9N) |
| Exchanging fiat for EMTs (on-ramp and off-ramp) | Service (c), exchange for funds with own capital (Article 3(1)(19)) | Not a payment service (EBA); holding or moving client euros alongside it is, with PSD2 authorisation in-house or via a third party (Article 70(4)) | MLR registration as a cryptoasset exchange provider; the pound leg is a payment service where client money is held or moved: our reading | FSMA authorisation for dealing as principal (9T) or agent (9W), or arranging (9Y); MLR registration does not convert |
| Transferring EMTs on behalf of clients (payout rails) | Service (j), transfer services between DLT addresses or accounts for a natural or legal person (Article 3(1)(26)) | Payment service (EBA), Annex I point 3 or 6; PI or EMI licence or PSP partnership since 2 March 2026, or a duly submitted, complete PI or EMI application plus the EBA opinion’s other conditions, pending the decision | No transfer-specific MLR category; custodian wallet provider registration where you hold the client’s USDC or keys; USDC leg outside the PSRs 2017: our reading | No stand-alone transfer activity in SI 2026/102; safeguarding (9N) catches a firm that controls the means of moving a client’s coin, whether or not it holds it (FCA PS26/11, June 2026); a self-custody model where only the client can transfer is outside 9N |
| Paying merchants in EMTs (acquiring and settlement) | Service (j) for the transfer, (c) where converting; the merchant’s own position is on the country licence map (merchant payments row) | PSD2 on the transfer and custody legs; euro settlement to the merchant is a payment transaction or money remittance | MLR registration; pound settlement is a payment service (PSRs 2017 Schedule 1, paragraphs 1(c), 1(f)); consumer marketing under the financial promotions regime since 8 October 2023 | Safeguarding (9N) where the processor holds EMTs; dealing (9T or 9W) where it converts. EMI-only or PI-only firms cannot approve crypto promotions |
| Lending against crypto (crypto-backed financing) | Not among the ten Article 3(1)(16) services; national lending law governs the loan. Custody of collateral is service (a) | Disbursing or repaying in EMTs is a transfer of EMTs for the client, so a payment service: our reading, verify | MLR registration as a custodian wallet provider for the collateral; consumer-credit rules are separate | Safeguarding (9N) for the collateral; lending within dealing as principal (9T), as HM Treasury’s note suggests, is unconfirmed in the SI text: verify |
Sources, read 26 October 2026, plus the MiCA and EBA texts above: FCA AML/CTF page (12 February 2026); PSRs 2017 and Schedule 1; EMRs 2011; SI 2026/102; FCA marketing page.
The UK: what applies now and what changes on 25 October 2027
The UK has no deeming rule: the Electronic Money Regulations 2011 define electronic money (regulation 2(1)) as stored monetary value represented by a claim on the issuer, and nothing deems a stablecoin to be e-money. On our reading a third-party coin such as USDC falls outside that definition, so only the pound legs are payment services under the Payment Services Regulations 2017: verify against your coin. Cryptoasset exchange providers and custodian wallet providers carrying on that business in the UK register under the MLRs before starting (FCA page, 12 February 2026), a regime the FCA expects to run until 25 October 2027; an overseas firm with no UK establishment is reached from that date by FSMA section 418 where it deals with, arranges for or safeguards for a UK consumer and no UK-authorised firm sits in the chain (Schedule C); institutional-only models: verify.
The new regime is made law: the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, SI 2026/102, made on 4 February 2026 (the April 2025 draft was the Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025, laid in final form on 15 December 2025). Regulation 1(2) sets 25 October 2027 as full commencement day; regulation 1(3) brought the Regulations into force 21 days after making for FCA rule-making and Part 4A applications. The new activities are issuing a qualifying stablecoin (RAO article 9M, where it is offered, redeemed and backed from a UK establishment; article 88G: stable value against a fiat currency, backed by assets held for that purpose), safeguarding (9N), operating a trading platform (9S), dealing as principal (9T) and agent (9W), arranging (9Y) and staking (9Z6).
The FCA’s regime page of 30 June 2026 schedules the application window from 30 September 2026 to 28 February 2027; firms applying within it may, subject to conditions, continue the specified activities until their application is determined; MLR registrations do not convert; firms within scope of a regulated cryptoasset activity need FSMA authorisation, which for issuers follows from article 9M and PS26/10. PS26/10 sets the final rules for non-systemic UK-issued qualifying stablecoins and PS26/11 (June 2026) the rules for the other regulated cryptoasset activities, safeguarding included; both sets of Handbook instruments come into force on 25 October 2027. A UK EMI licence does not cover issuing a qualifying stablecoin.
Sources, read 26 October 2026: SI 2026/102; HM Treasury policy note page (updated 16 December 2025); FCA regime page (30 June 2026); FCA PS26/10; FCA PS26/11 (June 2026); FCA AML/CTF page.
Schedule B: who authorises what
| Permission | Who grants it, under what | Passport | Status |
|---|---|---|---|
| EU crypto-asset services | Home member state regulator, CASP authorisation (MiCA Article 63); an EMI notifies under Article 60(4) only for custody and transfer of the e-money tokens it issues itself | EU-wide by notification (Article 65) | Live; Article 143 cover ended 1 July 2026 at the latest |
| EU payment services in EMTs | National regulator, payment institution authorisation (PSD2 Article 11(1)); EMI under EMD2 if you also issue | EU-wide by notification (PSD2 Article 28(1)) | Required since 2 March 2026 (EBA); PSD3 and the PSR not in force at 17 April 2026: verify |
| UK crypto exchange and custody, now | FCA registration under the MLRs | None | Before starting; until 25 October 2027 (expected) |
| UK pound legs | FCA, PSRs 2017 or EMRs 2011 | None | Live |
| UK cryptoasset activities from 25 October 2027 | FCA Part 4A permission under FSMA as amended by SI 2026/102 | None | Window scheduled 30 September 2026 to 28 February 2027 (FCA page, 30 June 2026; no FCA page read on 26 October 2026 records whether it opened); full commencement 25 October 2027 |
Schedule C: what a company outside the EU and the UK must set up
Neither regime passports into the other, so a company outside both needs an entity in each. The EU entity, the member-state choice and the CASP file are on MiCA authorisation; this table holds the entry conditions only. The US column, FinCEN money transmission and the GENIUS Act issuer rules, belongs to the country licence map.
| Condition | EU | UK |
|---|---|---|
| Legal entity | Registered office in a member state where part of the services are performed, effective management in the Union, one EU-resident director (MiCA Article 59(2)); a payment institution is a legal person established in a member state (PSD2 Article 11(1)) | FG26/7 (30 June 2026): baseline expectation of a UK legal entity, with a limited branch exception for trading-platform operators from comparable regimes |
| Serving clients without local authorisation | Not permitted: ESMA’s statements of 17 April and 23 June 2026 bar non-EU firms from providing MiCA services to EU clients or soliciting them, business to business included, outside the narrow reverse-solicitation exception | From 25 October 2027, FSMA section 418(6C) to (6E) treat an overseas firm dealing with, arranging for or safeguarding for a UK consumer as acting in the UK unless a UK-authorised firm sits in the chain; HM Treasury’s institutional-only carve-out: verify |
| Passport | Inside the EU only, for the CASP and the payment institution alike | None, into or out of the UK |
Sources, read 26 October 2026, plus MiCA, PSD2 and SI 2026/102 above: ESMA, 17 April 2026; ESMA, 23 June 2026; FCA FG26/7; HM Treasury page.
The order to run it in
- List the rows you perform. Who can move a client’s coin alone decides the custody row; the architecture test is in the joint article with Reah.
- Register and file in order. EU: an EMI notifies under Article 60(4) only for the e-money tokens it issues itself; for USDC it applies for CASP authorisation under Article 63 like everyone else, then adds or keeps the payment institution or EMI licence. UK: MLR registration first, then a Part 4A application before 28 February 2027.
- Check each EMT transfer against the travel rule. The data duties by regime are in the crypto travel rule compared.
- Keep yield out of the product until you have read stablecoin yield across jurisdictions, which owns the market-by-market position.
Who signs what on a stablecoin payments review
Infinilex counsel qualified in India, the UAE and the US sign opinions for those jurisdictions. For the EU and the UK, as for any other jurisdiction, Infinilex scopes the work, builds the fact record and coordinates the local counsel who sign, each named to you before they act; Infinilex holds no UK qualification. An India leg is signed by an advocate enrolled in India at Infinilex, with the in-house chartered accountant or company secretary where a statute names that professional.
Frequently asked questions
Do stablecoin payment companies need an EMI licence in the EU?
A PSD2 authorisation (payment institution or EMI) or a PSP partnership, yes, where they transfer e-money tokens for clients or hold them in custody. MiCA Article 48(2) deems e-money tokens to be electronic money, so they are funds under PSD2, and the EBA's No Action letter of 10 June 2025 treats those two services as payment services, with the transition ending on 2 March 2026. An EMI or credit institution authorisation is what issuing the token takes (Article 48(1)).
Is moving USDC for clients a CASP transfer service under MiCA, and is CASP authorisation enough?
It is the transfer service in Article 3(1)(16)(j): moving crypto-assets between distributed ledger addresses or accounts for clients. CASP authorisation under Article 59 is required, and since 1 July 2026 no transitional cover remains. For USDC it is not enough on its own: the EBA treats the same transfer as a PSD2 payment service when the asset is an e-money token, so a payment institution or EMI authorisation, or a PSP partnership, sits on top.
What licences do crypto-backed financing providers need?
Lending is not one of MiCA's ten crypto-asset services, so the loan answers to national lending and consumer-credit law: verify. Holding the collateral is custody (Article 3(1)(16)(a)), and paying out or repaying in e-money tokens is a transfer of EMTs for the client, on our reading a PSD2 payment service. In the UK the collateral holder registers today under the Money Laundering Regulations; from 25 October 2027 safeguarding needs FSMA authorisation, and lending within dealing as principal (article 9T) is unconfirmed in SI 2026/102: verify.
Do I need a UK licence to move stablecoins for UK clients today, and what changes on 25 October 2027?
There is no UK crypto licence today. A firm carrying on cryptoasset exchange or custodian wallet business in the UK registers with the FCA under the Money Laundering Regulations before it starts; an overseas firm with no UK establishment is reached from 25 October 2027 by FSMA section 418 where it deals with, arranges for or safeguards for a UK consumer and no UK-authorised firm sits in the chain; institutional-only models: verify. The UK has no deeming rule: on our reading a third-party coin such as USDC falls outside the Electronic Money Regulations 2011 definition, so only the pound legs sit under the Payment Services Regulations 2017: verify against your coin. From 25 October 2027 the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 make safeguarding, dealing, arranging, operating a trading platform, staking and issuing a qualifying stablecoin FCA-authorised activities; the application window is scheduled from 30 September 2026 to 28 February 2027.
Moving stablecoins for clients in the EU or the UK?
Tell us which rows you perform, where the clients sit and who holds the keys. We map the EU and UK permissions against your facts before you commit to an entity.
Thirty minutes with Prashant Sharma, the founder, who does the work himself. You leave with next steps either way. Email is read by the founder and answered within one working day.
Further reading
Stablecoin issuance · MiCA authorisation · Where to issue a stablecoin · Stablecoin yield across jurisdictions · Crypto licence requirements by country · The crypto travel rule · Non-custodial wallets and custody licensing
General information, not legal advice. Positions are stated as at 26 October 2026 from the texts cited; PSD3 and the UK window will move, and cells marked “our reading” or “verify” are not regulator text. Have it reviewed against your own flows.