E-money license in Germany
An e-money institution issues electronic money: the balance in a wallet, on a prepaid card or in a euro stablecoin. In Germany it needs BaFin authorization under section 11 of the Payment Services Supervision Act (ZAG) and at least 350,000 euros of initial capital. Dated events on payments and digital money are in the calendar below.
What an e-money institution may do
An e-money institution, or EMI, issues electronic money against euros the customer pays in and redeems it on request. It may also offer payment services such as transfers and card payments. It may not take deposits or grant loans out of customer money the way a bank does, according to Stripe's overview of e-money institutions in Germany.
The money customers pay in is safeguarded: the EMI keeps it apart from its own assets, in a trust account at a bank or covered by an insurance policy or a guarantee, so customers get it back if the institution fails. The page on payments regulation in Germany describes the safeguarding rules of the ZAG in detail.
E-money license or payment institution license
Both are ZAG licenses from BaFin, and the same BaFin overview covers them: payment institutions under section 10 ZAG and e-money institutions under section 11. The difference is the product. A payment institution moves money for its customers but does not keep a stored balance of electronic money for them. An EMI does, and section 12 ZAG asks it for 350,000 euros of initial capital, against 125,000 euros for a payment institution with the full range of payment services.
An EMI licensed in Germany can work across the EEA through branches, agents or the free provision of services after notifying BaFin, and BaFin lists every such institution in its register of ZAG institutions.
E-money tokens under MiCAR
The Markets in Crypto-Assets Regulation calls a stablecoin that refers to one official currency an e-money token and deems it electronic money. Under Article 48 of MiCAR, only a credit institution or an e-money institution may offer such a token to the public in the EU. A company that wants to issue a euro stablecoin without a banking license therefore needs an e-money license first.
AllUnity in Frankfurt issues EURAU, a euro-backed stablecoin, under a BaFin e-money institution license. The page on euro stablecoins under MiCA compares the issuers and their models.
Upcoming payments and digital money events in Germany
Finance Loop and e-money
Finance Loop is the meeting place for people who build and supervise payments and digital money in Germany, Austria and Switzerland: payment and e-money institutions, banks, stablecoin issuers and their lawyers. It connects the finance, IT and AI communities, with events in Frankfurt, Munich, Berlin and Hamburg.
Finance Loop is a strategic partner of the Digital Euro Association, host of the Digital Euro Conference in Frankfurt. It supported the Bybit EU x Circle Roadshow in Frankfurt, co-hosted by Circle, the issuer of USDC and EURC.
How much capital does an e-money institution need in Germany?
At least 350,000 euros of initial capital under section 12 ZAG. A payment institution offering the full range of payment services needs 125,000 euros.
What is the difference between an e-money institution and a bank?
A bank may take deposits and lend them out. An e-money institution issues electronic money, must safeguard the customers' money and may not lend it out. Both are supervised by BaFin, a bank under the KWG and an EMI under the ZAG.
Do stablecoin issuers need an e-money license?
An issuer of a stablecoin that refers to a single currency, such as the euro, has to be a credit institution or an e-money institution under MiCAR. Stablecoins that refer to several assets follow MiCAR's rules for asset-referenced tokens, explained on the MiCAR page.
E-money and Finance Loop
Finance Loop covers e-money in its Payments & Digital Money track, where wallets, prepaid cards and euro stablecoins rest on the same license. People from payment institutions, banks and stablecoin issuers meet at Finance Loop events and at the Digital Euro Conference, where Finance Loop is a partner.
Finance Loop is a professional network and has the goal of driving the adoption of emerging technologies in finance, such as AI, digital payments, cloud and blockchain solutions. Finance Loop helps its members build skills and personal networks in these fields: Investment & Digital Assets, Payments & Digital Money, Digital Infrastructure & Sovereignty, and Risk & Compliance.