What is Europe’s Electronic Money Directive or EMD?

The Electronic Money Directive (EMD) is a piece of European Union (EU) legislation that sets out the regulatory framework for electronic money (e-money) in the EU. The EMD applies to all financial institutions that are authorized to issue e-money in the EU, known as electronic money institutions (EMIs).

The main purpose of the EMD is to ensure the integrity and stability of the e-money market in the EU by setting out rules on matters such as financial stability, consumer protection, and anti-money laundering. The EMD also aims to promote the use of e-money and to facilitate the development of the e-money market in the EU by establishing a single market for e-money and reducing the burden of regulation on EMIs.

The EMD applies to all types of e-money, including electronic wallets, prepaid cards, and other electronic payment instruments. It sets out requirements for EMIs with respect to the issuance, redemption, and acceptance of e-money, as well as the maintenance of financial records and the protection of customer funds. The EMD also requires EMIs to have in place appropriate measures to ensure the security of e-money transactions and to protect against fraud and other risks.

The EMD is implemented and enforced by national regulators in the EU member states. EMIs that wish to operate in the EU must obtain an EMI license from the relevant national regulator in the member state where they are based.

This page was last updated on June 5, 2023.

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