On 3 February 2026, the Central Bank of Cyprus (“CBC”) published an announcement (available here) following the European Banking Authority’s No Action Letter (available here) on the interplay between the PSD2 (Directive (EU) 2015/2366) and the MiCA Regulation (Regulation (EU) 2023/1114). The No Action Letter focuses on the treatment of crypto-asset service providers (“CASPs”) that transact electronic money tokens (”EMTs”).
According to the No Action Letter, the European Banking Authority (“EBA”) considers the following activities to constitute payment service under PSD2:
- Transfer of crypto assets where they entail EMTs and are offered and carried out by the entities on behalf of their clients.
- Custody and administration of EMTs on behalf of clients.
EBA further clarifies that custodial wallets may also qualify as “payment accounts” under PSD2 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.
At the same time, EBA notes that the following activities are not within the scope of PSD2:
- Exchange of crypto-assets for funds.
- Exchange of crypto-assets for other crypto-assets.
- Intermediation in the purchase of crypto-assets using EMTs.
CASPs intending to provide the services described in points (i) and (ii) above are required to seek authorisation as payment service providers, unless they have entered into a partnership with an authorised payment service provider.
In its announcement, CBC requests CASPs to conduct a self-assessment to determine whether the crypto-asset services they offer qualify as payment services, as per the provisions of the EBA’s No Action letter. Where this is the case, CASPs must obtain authorisation from CBC, unless alternative arrangements with an authorised payment service provider are in place. CASPs requiring authorisation as payment institutions must complete and submit the relevant application form to CBC.
CBC further indicates that CASPs already providing EMT-related payment services were expected to submit their authorisation applications by 20 February 2026.
Overall, the CBC’s announcement, read together with the EBA’s No Action Letter, signals a decisive step toward closing regulatory gaps between traditional financial services and the evolving crypto-asset ecosystem. By clarifying that certain EMT-related activities - particularly transfer and custody -may fall within the scope of PSD2, regulators are effectively reinforcing the principle of “same activity, same risk, same rules”.
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