Electronic money token

The category covers the euro and dollar tokens that exchanges list as cash-like balances. Article 49 gives every holder a claim against the issuer, redeemable at any time at par value and with no fee, while Article 50 bans interest from issuers and crypto-asset service providers alike. Park sale proceeds in one and you hold a supervised claim on a company, not a bank deposit.

How it works

MiCA Article 3(1)(7) defines the token as a crypto-asset purporting to maintain a stable value by referencing one official currency, meaning one issued by a central bank or other monetary authority. Article 48(1) then narrows who may bring one to market: nobody may offer it to the public in the Union or seek its admission to trading unless they are the issuer, authorised as a credit institution or an electronic money institution, with a notified and published crypto-asset white paper. Its second subparagraph lets others offer it on the issuer's written consent, under Articles 50 and 53. The issuer must tell its national competent authority at least 40 working days before the offer begins. Article 48(2) deems these tokens to be electronic money, and Article 48(3) applies Titles II and III of Directive 2009/110/EC to them unless this Title states otherwise.

Issuance happens at par value on receipt of funds, and Article 49 lets a holder demand redemption at any time, at par, in funds that are not electronic money, with no fee under Article 49(6). Article 50's interest ban is drawn widely enough to catch net compensation or discounts whose effect depends on how long you held. Article 54 says where the money waits: at least 30% of the funds received is always deposited in separate accounts at credit institutions, and the rest goes into secure, low-risk, highly liquid instruments denominated in the same currency the token references.

Where you see it

Exchange listings are where an electronic money token reaches most bitcoin buyers: a euro or dollar token is the settlement leg of the pair. Size then decides the supervisor. Article 56 hands classification to the EBA, which labels a token significant once at least three of the seven Article 43(1) criteria are met, including more than 10 million holders, more than EUR 5 billion issued, a daily average above 2.5 million transactions and EUR 500 million, gatekeeper designation under Regulation (EU) 2022/1925, and interconnectedness with the financial system. Supervision transfers from the national authority to the EBA within 20 working days.

Tokens referencing a currency other than a Member State's carry an extra brake. Article 58(3) applies Articles 22, 23 and 24(3) to them, so a dollar-referencing token whose quarterly average use as a means of exchange in one currency area passes 1 million transactions and EUR 200 million per day must stop being issued until a plan brings it back under the cap.

Electronic money token vs Asset-referenced token

Asset-referenced tokens are defined by exclusion. Article 3(1)(6) describes a crypto-asset that is not an electronic money token and purports to maintain a stable value by referencing another value or right, or a combination, including one or more official currencies. One currency puts a token under Title IV; a basket, a commodity or anything else puts it under Title III, with its own authorisation route and reserve regime. The issuer test differs too: a Title IV issuer must already hold a banking or e-money licence, while a Title III issuer is authorised to issue the token itself.

Electronic money token vs Stablecoin

Stablecoin is a market word rather than a legal one. MiCA uses it once, in recital 41, inside quotation marks, only to rule out a third category: whatever the design, including algorithmic supply mechanisms, a crypto-asset aiming at a stable value against one official currency falls under Title IV, and one referencing anything else falls under Title III. Asking whether something is a stablecoin gets a marketing answer; asking its MiCA class gets the licence, the redemption right and the reserve rules.