3.3 E-Money Tokens (EMTs) and Their Role in RWA Settlement
What makes a token an e-money token and who may issue one, which promises on redemption, interest and reserves come with it, how many exist and in which currencies, why payment licensing and multi-issuance are still unsettled, and where EU settlement law ranks e-money tokens against central bank money and tokenized deposits.
An e-money token is not a new kind of money. It is electronic money, which EU law has regulated since 2000, recorded on a distributed ledger1. The Markets in Crypto-Assets Regulation (MiCA) keeps that substance and adds the crypto-asset layer on top: a white paper, marketing rules, and supervision of anyone who holds or moves the token for clients. For a tokenized real-world asset the e-money token (EMT) matters for a narrower reason. It is the only MiCA category built to be the cash leg of a trade, the euro or dollar that moves on the same ledger as the bond or fund unit it pays for. Whether it can play that role turns less on MiCA than on the settlement rules around it, and those rules still put it last in line.
Section 3.2 covered the other stable-value category, the asset-referenced token, which references a basket, a commodity or several currencies, and found that none had been authorized by 1 September 2026. This section takes the category that references exactly one official currency, which unlike the first already exists in some volume. Section 4.4 of the companion paper described how stablecoins settle tokenized assets across jurisdictions and quoted the hierarchy of settlement assets in the EU's Pilot Regime for market infrastructures based on distributed ledger technology (DLT), and Section 3.1 placed EMTs on MiCA's map. What this section adds is the EU legal detail: what Title IV of MiCA requires, how many EMTs existed on 14 October 2026, which questions the European Banking Authority (EBA) still calls open, and what the European Commission's December 2025 proposal would change about EMTs as a cash leg. Statuses are as of 14 October 2026. Chapter 4 takes up the United States, where Section 4.2 treats payment stablecoins as settlement rails.
An E-Money Token Is E-Money First
MiCA defines an e-money token as "a type of crypto-asset that purports to maintain a stable value by referencing the value of one official currency"2. The test is what the token references, not how it is built. The recitals ask for a definition "as wide as possible to capture all types of crypto-assets referencing a single official currency," and say Title IV applies "irrespective of how the issuer intends to design the crypto-asset, including the mechanism for maintaining a stable value"2. A token pegged to the euro by an algorithm, by a reserve or by a promise lands in the same category.
Who may issue it is the first hard constraint. Under Article 48(1), only the issuer may offer an EMT to the public or seek its admission to trading, and only if it "is authorised as a credit institution or as an electronic money institution" and has notified and published a white paper2. Others may offer it with the issuer's written consent. Article 48(2) then settles the legal nature in one line: "E-money tokens shall be deemed to be electronic money"2. The same paragraph deems any EMT that references a member state's currency to be offered to the public in the Union, so a euro token cannot be kept outside the regime by marketing it from abroad.
The paperwork is notification, not approval. The issuer tells its competent authority at least 40 working days before an offer or admission to trading (Article 48(6)) and notifies the white paper at least 20 working days before publishing it, and "Competent authorities shall not require prior approval" (Article 51(11))2. The white paper's first page must say that it "has not been approved by any competent authority in any Member State of the European Union," and it must warn that the token is covered neither by investor compensation schemes nor by deposit guarantee schemes (Article 51(3) and (4))2.
For an RWA project the consequence is structural. A fund manager, a tokenization platform or a special purpose vehicle cannot mint its own euro token to settle subscriptions. It either becomes a bank or an electronic money institution (EMI), partners with one, or uses something MiCA does not cover at all. Deposits are outside MiCA by Article 2(4)(b)2, which is why a tokenized bank deposit, discussed at the end of this section, is a separate legal object.
Three Promises: Par, Any Time, and No Interest
Title IV turns e-money's familiar guarantees into token terms. Holders "shall have a claim against the issuers" (Article 49(2)). Issuers issue "at par value and on the receipt of funds" (Article 49(3)). On request, the issuer must redeem "at any time and at par value," paying in funds other than electronic money (Article 49(4)), and redemption "shall not be subject to a fee" (Article 49(6))2.
The interest ban is broader than it first looks. Article 50(1) bars issuers from granting interest, Article 50(2) extends the ban to crypto-asset service providers (CASPs) providing services related to EMTs, and Article 50(3) treats as interest "any remuneration or any other benefit related to the length of time" a holder keeps the token, including discounts or compensation "directly from the issuer or from third parties"2. In its September 2026 response to the Commission's review of MiCA, the EBA said interest and interest-equivalent remuneration "should continue to be prohibited" for both asset-referenced tokens and EMTs3. For a tokenized fund platform this fixes where the yield sits. Cash waiting in an EMT earns nothing for the holder, so idle balances move into a yield-bearing token, typically a tokenized money market fund, which is the pattern Section 4.4 of the companion paper traced across the United States and the United Kingdom.
Behind the par promise sit the reserves. Article 54 requires that "at least 30 % of the funds received is always deposited in separate accounts in credit institutions," with the rest in "secure, low-risk assets" that qualify as highly liquid financial instruments, "denominated in the same official currency" as the token2. When an EMI's token becomes significant, Article 58(1) applies the stricter reserve, custody and liquidity rules written for asset-referenced tokens, including a deposit floor that "cannot be lower than 60 %" (Article 45(7)(b)) and own funds of "3 % of the average amount of the reserve assets" (Article 45(5))2. Credit institutions are treated differently: they are not required to hold a segregated reserve for their EMTs, and the EBA advised in September 2026 to keep it that way, because banks already run the liquidity coverage and net stable funding ratios that EMIs do not3. Reserve composition, custody, audits and reporting are the subject of Section 3.7.
One part of the par promise is less precise than it sounds. The EBA notes that "Neither the recitals nor operative provisions of MiCA establish the maximum timeframe for redemption in 'business as usual' conditions," and observes market practice within the EU and globally of "T+1, T+2, T+4"3. For settlement this matters. A tokenized bond can be delivered against an EMT atomically on the ledger, but turning the EMT back into money in a bank account can still take several business days, and MiCA's "at any time" does not by itself fix how many.
Significance Moves Supervision to the EBA, and Dollar Tokens Face a Payments Cap
An EMT becomes significant when the EBA finds that at least three of the criteria in Article 43(1) are met2. The quantitative ones are more than 10 million holders; a value issued, market capitalization or reserve above EUR 5 billion; and more than 2.5 million transactions and EUR 500 million a day on average. The qualitative ones include gatekeeper status under the Digital Markets Act, international significance, interconnectedness with the financial system, and an issuer that also issues other tokens and provides crypto-asset services (Article 56(1) applying Article 43(1))2. Supervision then passes from the national authority to the EBA (Article 56(6)), except for a significant token in a non-euro EU currency where at least 80% of holders and transactions are in the home member state (Article 56(7))2. As of its 24 September 2026 response, the EBA was "conducting the significance assessment process for the first time in 2026"3.
EMTs in a non-EU currency carry an extra constraint. Article 58(3) applies to them the reporting duty and the issuance cap written for asset-referenced tokens2. Above EUR 100 million in issue value, the issuer reports quarterly on holders, value and transactions (Article 22). Where the estimated daily use "as a means of exchange within a single currency area" exceeds 1 million transactions and EUR 200 million, the issuer must "stop issuing" and submit a plan to bring use back under those figures (Article 23)2. A dollar EMT that became a common payment instrument in the euro area would hit that ceiling.
Settlement of investments is meant to sit outside it. The Commission's delegated regulation on the estimation methodology lets the issuer deduct exchanges with the issuer or a CASP, use as collateral for transactions in financial instruments, settlement of derivatives, and "other transactions" where it "has reasonable grounds to assume that the purpose of the respective transactions is not to pay for goods or services"4. Its recitals say the measure concerns "payments of debts" and should not include "transactions associated with investment functions and services"4. The burden sits with the issuer, which must be able to demonstrate those grounds to its authority on request4. A dollar EMT that settles tokenized fund subscriptions is therefore not the cap's target, but its issuer has to be able to prove what the transactions were for.
Thirty-Nine Tokens and a Euro Market Measured in Millions
The EMT regime has been running since mid-2024. As at 1 September 2026, the EBA counted "39 electronic money tokens (EMTs)" issued under MiCA and "0 asset-referenced tokens (ARTs) authorised"3. Of the 39, "36 have been issued by electronic money institutions"3. Among banks, "3 credit institutions issue EMTs directly, and 1 has established a subsidiary to carry out issuance activities," and the EBA noted "a proposal among a consortium of EU banks to establish a special purpose vehicle for EMT issuance"3. That consortium, Qivalis, announced on 2 December 2025 that ten banks backed it and that it was working towards authorization as an EMI by De Nederlandsche Bank, with a euro token planned for the second half of 20265. It did not appear in the European Securities and Markets Authority's (ESMA) register file updated on 7 October 20266.
That register file lists 25 EMT issuers, by legal entity identifier, with home member states in 13 EU countries plus Iceland; France hosts the most, with six6. The entries include Circle's euro and dollar tokens, Société Générale-Forge's EURCV and USDCV, and white papers for tokens referencing the euro, the US dollar, the Swiss franc, the Swedish krona, sterling, the Polish zloty and the Romanian leu6. The EBA's count and ESMA's list measure different things, tokens issued against issuers and white papers notified, so they should not be reconciled one to one.
In value the euro side is small. European Central Bank (ECB) staff wrote in April 2026 that "As of January 2026, euro-denominated stablecoins have a modest market capitalisation of around €450 million, up from €50 million at the beginning of 2024," against dollar stablecoins at "around USD 300 billion"1. They put the three largest euro tokens, EURC, EURCV and EURI, at a combined EUR 0.45 billion on 20 February 20261. Section 6.4 of the companion paper recorded the same imbalance in November 2025: clear rules beside strong demand for dollar coins and small demand for euro ones.
The newest bank issuers are aimed at tokenized assets rather than retail payments. On 1 July 2026 Crédit Agricole announced EURXT, issued on Ethereum by its asset servicer CACEIS, and said its first issuance settled "a subscription to the Amundi Money Market Fund," which it called "the first subscription to a tokenised Luxembourg-domiciled UCITS money market fund settled in euro stablecoin at the European level"7. Its reserves consist "exclusively of cash held on the balance sheet of CACEIS Bank"7. That is the bank model Article 58 allows: the holder's claim is on a bank's balance sheet rather than on a ring-fenced pool, and the yield the token cannot pay sits in the fund it bought.
Moving an EMT for a Client Can Need a Second License
Because an EMT is both e-money and a crypto-asset, a firm that holds or moves EMTs for clients can fall under two regimes at once: MiCA, as a CASP, and the Payment Services Directive (PSD2), as a payment service provider. The EBA addressed the overlap in a no-action letter published on 10 June 20258. It advised national authorities to treat the transfer of crypto-assets as a payment service "where they entail EMTs and are carried out by the entities on behalf of their clients," and to treat a custodial wallet as a payment account "where the wallet is held in the name of one or more clients and allows to send and receive EMTs to and from third parties"8. For those services, authorities were to require a PSD2 authorization "only from 2 March 2026 onwards"8. The letter excluded the exchange of crypto-assets for funds or for other crypto-assets, and the intermediated purchase of crypto-assets with EMTs, from payment-services licensing8.
The deadline has passed. In an Opinion of 12 February 2026, the EBA advised authorities to require CASPs that did not meet its conditions "to discontinue the provision of such EMT services" after 2 March 20269. The longer-term fix is the new payment services package, PSD3 and the Payment Services Regulation. The EBA wrote that, as at 1 September 2026, their texts "have not been published in the Official Journal," and that while they clarify the boundary, they "do not remove the double authorisation requirement for CASPs providing payment services with EMTs"3. The compromise texts would also let payment institutions provide some EMT-related crypto-asset services by notification rather than a CASP license, which the EBA warned "may give rise to regulatory asymmetries"3.
For an RWA platform the practical point is that settling in EMTs is a payments activity as well as a crypto-asset one. A platform that keeps investors' EMT cash in custodial wallets and sends it to counterparties to settle trades should expect to need both authorizations, or a licensed partner for one of them. Section 3.6 covers the CASP side.
Multi-Issuance Splits One Cash Token Into Two Sets of Rights
Section 5.6 of the companion paper showed how one fungible dollar token can carry two sets of redemption rights, one for holders in the European Economic Area under MiCA and one for everyone else, and recorded the European Systemic Risk Board's recommendation that the Commission read MiCA as not permitting such schemes. The EBA's September 2026 response shows that the question had not moved. MiCA's articles "do not explicitly refer to" third-country multi-issuer schemes, and questions on their permissibility "remain unanswered by the European Commission"3. "Currently, two EMIs participate in TCMIS (both re USD denominated EMTs)," the EBA wrote, using its abbreviation for third-country multi-issuer stablecoin schemes3.
The EBA's concern is that reserves "are not located in the same jurisdiction as the issuer to whom redemption requests are addressed," so that a run on the EU issuer could leave EU holders facing shortfalls if rebalancing between co-issuers fails3. It thinks current tools can partly contain this, but warned that if the number or scale of such schemes changes, the risks "could become 'very significant' and may not be capable of being managed effectively under MiCA"3. It proposed adding participation in a multi-issuance scheme as a new criterion for significance3. A tokenized fund that settles in a multi-issued dollar token is therefore paid in an instrument whose redemption terms depend on where the holder sits, a fact the token itself does not record.
In EU Settlement Law, the EMT Ranks Behind Central Bank and Bank Money
The DLT Pilot Regime's Article 5(8), quoted in Section 4.4 of the companion paper, already ranks the cash leg: central bank money where practical and available, then commercial bank money, or e-money tokens. ESMA's June 2025 review, also recorded there, found that 21X, a DLT market infrastructure authorized under the Pilot, settles in euro and dollar EMTs. The Commission's proposal of 4 December 2025 keeps that order, settling payments "through central bank money, including in tokenised form, where practical and available" before commercial bank money "or using 'e-money tokens'" in a new Article 5(8a), and writes EMTs further into it10. Its recitals say "e-money tokens have emerged as one of the most widely used means of DLT-based settlement," and add that DLT market infrastructures "should be encouraged to offer settlement in e-money tokens denominated in euro"10. In the operative text, a new Article 5(8d) of the Pilot Regulation would allow settlement only in EMTs that reference an official EU currency, "except where carried out for the settlement of a DLT financial instrument denominated in a non-EU currency"10. Article 5(8e) would let a CASP authorized to hold EMTs provide the cash accounts10. A euro bond settled under the Pilot could no longer be paid for in a dollar token.
The same proposal would open the EU's central securities depositories (CSDs), the core of its securities settlement, to EMTs, but on narrow terms. A rewritten Article 40 of the CSD Regulation, retitled "Cash and e-money token settlement," would keep the rule that a CSD "shall settle the cash payments of its securities settlement system in central bank money where practical and available"10. A new Article 54c would let a CSD settle in EMTs only where the token "is listed in the ESMA register" and "is classified as a significant e-money token by EBA," and only "through pre-funded accounts"10. On 14 October 2026 the proposal was still "Awaiting committee decision" in the European Parliament11. As proposed, the CSD route would admit only EMTs large enough for the EBA to classify as significant, and in September 2026 the EBA was still running its first such assessment.
Central bank money is meanwhile arriving on ledgers. On 21 September 2026 the Eurosystem "launched Pontes, a solution that enables wholesale transactions in tokenised assets to be settled in central bank money," with full implementation expected by 202812, as Section 6.3 of the companion paper recorded. The Eurosystem's payments strategy of 31 March 2026 sets out where it wants private money to fit. Central bank money should remain "the anchor for settlement, complemented by private settlement assets such as tokenised deposits and stablecoins"13. Yet "even properly designed and regulated stablecoins may be less suitable as settlement assets," because of "potential deviations from par, limitations to scalability, fragmentation," illicit use and effects on bank lending, while "Tokenised deposits appear well suited as a private settlement asset for tokenised transactions," if they can gain scale13.
The difference between those two private assets is legal, not technical. The EBA found in December 2024 that recording a deposit on a ledger "does not per se alter the fundamental nature of the claim and thus its regulatory qualification as a deposit"14. Its comparison of tokenized deposits with EMTs issued by banks draws the line clearly. A tokenized deposit can pay interest and keeps deposit guarantee coverage, but is not transferable on secondary markets, and a transfer between clients of different banks still needs a parallel interbank settlement. An EMT is a bearer instrument that can circulate and serve as a settlement asset, cannot pay interest, and sits outside deposit guarantees14.
That leaves the EMT a specific niche in RWA settlement rather than the default. It fits where the cash has to move like the asset does: on public or shared ledgers, between parties that are not all banks, across borders, and outside banking hours, as in the 21X and EURXT cases. Where the counterparties are banks with access to central bank money, EU law and the Eurosystem point first to Pontes and then to tokenized deposits. Section 3.4 turns from the cash leg to the asset leg, and to the category where most tokenized real-world assets that are not financial instruments land under MiCA.
- An e-money token is e-money on a ledger. Only credit institutions and electronic money institutions may issue one, the white paper is notified rather than approved, holders can redeem at par at any time without a fee, and neither issuers nor CASPs may pay interest or any time-based benefit on it.
- The EBA counted 39 EMTs issued under MiCA as at 1 September 2026, 36 of them by electronic money institutions, against zero authorized asset-referenced tokens. ESMA's register file of 7 October 2026 lists 25 issuers, and ECB staff put euro stablecoins at around €450 million in January 2026 against around USD 300 billion for dollar ones.
- MiCA sets no maximum time for redemption, and the EBA reports market practice of T+1 to T+4. Bank issuers need no segregated reserve, as with CACEIS's EURXT, whose first issuance in July 2026 settled a subscription to a tokenized Amundi money market fund from reserves held as cash on CACEIS Bank's balance sheet.
- Two questions remain open. CASPs that transfer or hold EMTs for clients have needed a payment-services authorization since 2 March 2026, and the EBA says PSD3 and the PSR will not remove that double license; the permissibility of third-country multi-issuer schemes, in which two EU EMIs take part, remained unanswered by the Commission.
- EU settlement law ranks the EMT behind central bank and commercial bank money. The Commission's December 2025 proposal, still awaiting a committee decision on 14 October 2026, would require EU-currency EMTs for EU-currency assets on DLT venues and let CSDs settle only in EMTs the EBA classifies as significant, while the ECB calls stablecoins possibly "less suitable as settlement assets" and tokenized deposits "well suited."