A new ESMA Q&A clarifies that a crypto-asset service provider may temporarily hold client funds with an electronic money institution or payment institution under MiCA's safeguarding rules. By the end of the following business day, however, it must move them to an account at a credit institution or central bank opened in the provider's own name. An account in the payment provider's name does not meet the requirement, even if the funds are segregated. The answer appeared in ESMA's list of new Q&As on 16 October.
What it means: The clarification addresses a practical issue for many crypto providers. Customer euro deposits often pass through payment or e-money institutions, which offer IBANs and quick onboarding. ESMA allows that route only as an intermediate step, because MiCA requires client money to end up at a bank or central bank. The crucial point is that the account must be in the crypto provider's own name. A pooled structure in the payment provider's name is not enough, even if the funds are segregated. For providers, this means they need a direct banking relationship, which remains hard for crypto firms in many countries, and a daily process to sweep balances. In Greece, where the Hellenic Capital Market Commission is the competent authority for MiCA licensing, firms preparing applications should describe their fund flows and banking arrangements clearly. For customers, the requirement strengthens protection if a provider becomes insolvent. Firms that currently rely only on a payment institution for client balances need to change their set-up.
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