E-Money Tokens (EMTs): electronic money in the crypto era

Among the categories of crypto-assets defined by the MiCA Regulation, Electronic Money Tokens (EMTs) occupy a unique position. Designed as digital equivalents of electronic money, they could transform the way financial institutions manage flows between fiat currencies and crypto-assets.
Definition, regulatory framework, use cases and future prospects: here is everything you need to know about e-money tokens.

An Electronic Money Token (EMT) is a type of crypto-asset designed to maintain a stable value by referencing a single official currency, such as the euro or the US dollar.
In practice, each token corresponds to one unit of the reference currency. Issuers are required to establish a reserve of assets to back the tokens in circulation and guarantee holders’ redemption rights. Like other stablecoins, this mechanism is intended to reduce the volatility typically associated with crypto-assets.

Under the MiCA Regulation, EMTs are fully classified as crypto-assets. These are defined as digital representations of value or rights that can be transferred and stored electronically using distributed ledger technology, such as blockchain.

MiCA goes one step further by classifying EMTs as electronic money within the meaning of European legislation. This is a significant clarification, confirming their primary purpose: to serve as a means of payment or exchange.

In practical terms, EMT holders have a redemption right against the issuer at par value in the reference currency. If a token is pegged to the euro, the holder must be able to redeem it for the equivalent amount in euros at any time.
This approach aligns EMTs with electronic money solutions used in digital payments, while relying on blockchain-based infrastructure.

The MiCA Regulation distinguishes between three main categories of tokens, each governed by specific rules:

• Electronic Money Tokens (EMTs), backed by a single currency.
• Asset-Referenced Tokens (ARTs), linked to a basket of diversified assets (equities, bonds, currencies, commodities and others).
• Other crypto-assets, such as utility tokens and certain cryptocurrencies, are not backed by assets.

While EMTs are attractive because of their promise of stability, they are not without risk. The primary concern relates to the strength of the asset reserve intended to support the value of the tokens.
If the issuer does not actually hold the corresponding funds, or if those assets are poorly managed, the peg between the token and the reference currency may be compromised.

Other risks commonly associated with the crypto ecosystem also remain:

• Cyberattacks or technical failures
• Liquidity crises
• Issuer insolvency

In such circumstances, token holders may be exposed to losses.

To address these risks, the European Union has adopted a proactive approach. MiCA establishes a structured supervisory framework for stablecoin issuers, particularly EMT issuers.

National and European authorities are now equipped with new tools to monitor:

• Reserve management
• Operational transparency
• Issuers’ financial soundness

Several authorities play a role in this framework:

• National regulators, such as the AMF (Autorité des marchés financiers) and the ACPR (Autorité de contrôle prudentiel et de résolution) in France
• European authorities, including the EBA (European Banking Authority) and ESMA (European Securities and Markets Authority)

Their role is to ensure that market participants comply with MiCA requirements, particularly regarding risk management and public disclosure.

Beyond financial stability, regulators have a clear objective: protecting users.
For many years, the crypto-asset market developed with limited regulatory oversight. By introducing a dedicated framework for EMTs, MiCA seeks to establish a level of trust comparable to that found in traditional financial services.

For EMT issuance, MiCA builds on existing financial regulations, particularly those governing electronic money and payment services.
This approach allows crypto innovation to be integrated into the European legal framework without starting from scratch, while also imposing additional obligations on EMT issuers.

Designed for use as a means of payment, EMTs form a specific category of crypto-assets whose regulatory treatment closely resembles that of banking and payment services.

More stringent than the rules applicable to standard tokens, this framework requires fintechs wishing to issue EMTs to hold authorisation as either:

• an Electronic Money Institution (EMI)

OR

• a Credit Institution

The authorisation process is intended to assess the issuer’s financial robustness and operational capabilities. Competent authorities will examine, among other things:

• The business model
• Risk management arrangements
• Governance structures

Issuers must establish an asset reserve corresponding to the tokens in circulation. These reserves must comply with several principles:

• At least 30% of the funds received must be safeguarded in segregated accounts separate from the issuer’s own funds.
• The remaining funds may be invested in secure, liquid and high-quality assets (such as central bank deposits, government treasury bills or guaranteed investments).
• These assets must be denominated in the same currency as the reference currency.

EMT holders have a claim against the issuer.
The purpose of these requirements is to ensure that holders can recover their funds at any time.

Before any public issuance of EMTs, issuers must notify the ACPR of their intention to issue and submit a white paper for approval prior to publication.

The white paper must detail:

• The characteristics of the token
• Holders’ rights
• Associated risks
• The technology used

It creates legal accountability for the issuer and serves as a key transparency tool for users and market participants.

Another rule inherited from the electronic money regime is the strict prohibition on paying interest to EMT holders.
This clear boundary distinguishes EMTs from savings or investment products.

Electronic Money Tokens are not merely a regulatory category under MiCA. They are part of a broader transformation of money and payment infrastructures across Europe.

Unlike many crypto-assets primarily designed for investment or speculation, EMTs are intended to function as a digital medium of exchange with a purely transactional purpose.

In an increasingly programmable, API-driven payments environment, they could become a new infrastructure layer for:

• Cross-border digital payments
• Transactions on crypto platforms
• Certain decentralised finance (DeFi) applications
• Emerging embedded payment models

For technology companies and fintechs, EMTs pave the way for hybrid payment services that combine blockchain technology with traditional financial infrastructure.

Today, the stablecoin market remains largely dominated by the US dollar. By providing a legal framework for EMTs backed by official currencies, MiCA creates the conditions necessary for the emergence of euro-denominated stablecoins, strengthening Europe’s sovereignty over digital payment infrastructures.

At the same time, the European Union is working on another major initiative: the digital euro, a central bank digital currency (CBDC) issued by the European Central Bank.
Expected by 2029*, this public digital currency would naturally complement private stablecoins, particularly EMTs, as part of the broader trend towards the digitalisation of money and payments.

For businesses, platforms and fintechs managing increasingly hybrid transaction flows, the challenge will not be purely regulatory. It will also be strategic. Understanding how these new forms of digital money and tokenised payments can integrate with existing payment solutions—such as pay-in, pay-out and card issuing—will be essential to designing the next generation of financial services and user experiences.

*Sources: Banque de France and the European Central Bank