E-money issuance controls

Description

Issuing e-money (prepaid balances, wallets, stored value redeemable for goods or cash) is a regulated activity in every jurisdiction that has caught up with the category. In the EU, the second Electronic Money Directive (EMD2) and its successor regime under the Markets in Crypto-Assets Regulation for asset-referenced and e-money tokens set the operating envelope; in the UK, the Electronic Money Regulations 2011 do equivalent work; in the US, the same activity collapses into state money-transmitter licensing rather than a federal e-money regime. The substantive obligations cluster around four pieces: minimum capital (typically 350,000 EUR initial capital for an EU EMI plus an own-funds floor that scales with outstanding e-money), safeguarding of customer funds (segregated accounts or qualifying insurance, not commingled with operating capital), redemption rights (par-value redemption on demand, no fees on standard redemption), and transparency on fees and terms before issuance. A platform that issues prepaid balances casually (a closed-loop wallet that crossed the open-loop threshold by adding peer-to-peer transfer, for example) often discovers it has become an EMI issuer accidentally; the structural question is usually whether the product can be redesigned to stay closed-loop or whether the regulatory perimeter is the right place to be.

Applicability

Applies when: markets include EU or UK AND sector is fintech.

How predicates are evaluated

Required by (2 regulations)

• EU EMD2

  EMD2 Articles 11-13 — issuance at par value; redemption at any time at par value; redemption fees only in narrow circumstances; 1-year-after-termination max redemption obligation; no interest on stored e-money.

  Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009

• UK FCA Payments

  EMRs 2011 Regulations 39-44 — UK transposition of EMD2 issuance/redemption framework; FCA Handbook chapters operationalize.

  Payment Services Regulations 2017 (SI 2017/752); Electronic Money Regulations 2011 (SI 2011/99); FCA Handbook

Fulfilled by (1)

• In-house build · high effort

ClearLaunch does not accept payment from vendors. Methodology.

Evidence formats

• EMI authorization
• capital adequacy reports
• redemption-policy disclosure