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What is an Electronic Money Institution (EMI) License in Europe and what is it used for?

An electronic money institution (EMI) is a type of financial institution that specializes in issuing electronic money, also known as e-money. E-money is a digital representation of monetary value that is issued by an EMI and accepted as a means of payment by other parties.

In the European Union (EU), an EMI license is a type of authorization that is granted by national regulators to organizations that wish to engage in the business of issuing e-money. The EMI license is governed by the EU’s Electronic Money Directive (EMD), which sets out the requirements and conditions that EMIs must meet in order to operate in the EU.

An EMI license is used to ensure that EMIs are subject to appropriate regulatory oversight and can be held accountable for their activities. The EMI license is intended to protect consumers and ensure the integrity of the e-money market by setting out rules on matters such as financial stability, consumer protection, and anti-money laundering.

EMIs are authorized to issue e-money in the form of electronic wallets, prepaid cards, or other electronic payment instruments. E-money can be used to make payments for goods and services, to transfer funds between accounts, or to withdraw cash from ATMs. E-money is often used as an alternative to traditional bank accounts or credit cards, as it can be more convenient and cost-effective for certain types of transactions.

This page was last updated on January 2, 2023.