EU regulators have taken action again. The European Banking Authority (EBA) officially ended the temporary exemption policy for crypto asset service providers under PSD2 in early March. What does this mean? Simply put, crypto services engaged in electronic money token payments and transfers, which previously could operate without full compliance, now face the end of this grace period.

From now on, these service providers must hold a valid PSD2 payment institution or electronic money institution license to continue operating. Approved institutions are of course fine and can continue normal operations. But those still in the application process are in a tricky situation, only able to operate under restricted conditions, such as not adding new customers or engaging in marketing, essentially waiting for approval. The strictest are the completely non-compliant CASPs, which must immediately cease all payment-related services.

Interestingly, this regulatory move actually reflects a shift in the EU’s attitude toward the crypto industry. The PSD2 framework itself is already quite strict, and now including crypto service providers under the same regulatory standards indicates that the EU is increasingly viewing this sector as important. It’s said that over 100 crypto service providers have submitted or inquired about PSD2 license applications, which in itself shows the market’s level of interest.

In the short term, this will accelerate industry reshuffling. Some smaller players with insufficient technology or capital may not survive, but truly capable service providers could benefit from higher market barriers due to increased compliance costs. In the long run, although the EU’s PSD2 regulatory framework is strict, it also provides a clear compliance path for crypto payment services. This trend warrants ongoing attention.