E-money institution (EMI)
An e-money institution (EMI) is a firm authorised to issue electronic money, a stored monetary value that is a claim on the issuer and is accepted as payment by others. EMIs exist in EU law under the E-Money Directive and in UK law under the Electronic Money Regulations 2011.
This page explains the rules in general terms and is not legal or regulatory advice. Check the primary source and take advice on how the rules apply to your firm.
Jurisdiction: European Union: Directive 2009/110/EC (E-Money Directive), Articles 2, 4, 5, 6, 9 and 11. United Kingdom: Electronic Money Regulations 2011, with authorisation by the FCA.
How it works
Directive 2009/110/EC defines electronic money as "electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions", accepted by someone other than the issuer. An EMI needs initial capital of at least €350,000. Own funds for issuing e-money must be at least 2% of average outstanding e-money (Method D).
E-money must be issued at par value on receipt of funds and redeemed at par, at any moment, on the holder's request. EMIs cannot take deposits, and funds received must be exchanged for e-money without delay. Member states can waive some requirements for small issuers whose average outstanding e-money does not exceed €5,000,000.
EMIs can also provide payment services and must safeguard the funds they receive for e-money. Under MiCA, only credit institutions and e-money institutions can issue e-money tokens, the EU category that covers single-currency stablecoins. In the UK, the FCA authorises EMIs whose average outstanding e-money exceeds €5 million, and the EMRs set initial capital at 350,000 euro.
Example
An EMI has average outstanding e-money of €80,000,000 across customer wallets. Under Method D it needs own funds of at least €1,600,000, which is 2%. That is above the €350,000 initial capital floor, so €1,600,000 is the figure it must meet for its e-money business.
Frequently asked questions
How does an EMI differ from a payment institution?
An EMI can issue e-money, which customers hold as a balance and redeem at par. A payment institution moves money but cannot issue e-money. EMIs need more initial capital: €350,000, against €20,000 to €125,000.
Can an EMI issue a stablecoin in the EU?
Yes. MiCA lets credit institutions and e-money institutions issue e-money tokens, subject to its white paper, redemption and reserve rules.
Where Polynopsis fits
Polynopsis gives no regulatory advice. It shows an e-money institution where its money is across banks, partners and wallets, in one read-only position.
Compared with
Related terms
Sources
- Directive 2009/110/EC on the business of electronic money institutions · EUR-Lex, Publications Office of the European Union
- Apply to become an e-money institution · Financial Conduct Authority
- The Electronic Money Regulations 2011, regulation 19 (Capital requirements) · legislation.gov.uk (The National Archives)
- Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA) · EUR-Lex, Publications Office of the European Union
Know where all your money is.
Polynopsis gives cross-border payment teams one live position across every bank, payout partner, exchange and wallet, including money in flight, and warns before a corridor runs dry.
About Polynopsis
Polynopsis is liquidity management software for cross-border payment companies. The name joins poly, many, and synopsis, a seeing together: one live view of money spread across many banks, payout partners, exchanges and stablecoin wallets, including money in flight, with a warning before any corridor runs dry.
Why it is called Polynopsis · About Polynopsis · Glossary · Corridor runway calculator