--- title: "ESMA Q&A 1270 — Q&A — Settlement in e-money tokens [Answer Published]" shortTitle: "ESMA Q&A 1270 — Q&A — Settlement in e-money tokens [Answer Published]" answer_id: ESMA_QA_1270 topic: "DLT settlement system (DLT SS)" status: "Answer Published" type: qa instrument_type: qa authority: ESMA binding: false binding_character: non_binding legal_status: in_force regulation: "DLT Pilot" dlt_level3: true mica_level2: false legal_basis: "DLT Pilot" date: 2 June 2023 source_link: https://www.esma.europa.eu/publications-data/questions-answers/1270 lifecycle: "Answer Published" text_version: "ESMA Q&A register, 2 June 2023" source_url: "https://www.esma.europa.eu/publications-data/questions-answers/1270" check_status: matched verified: true last_checked: 2026-10-26 checked_against: "the ESMA publication" source: prepared_by: "European Commission" published_by: "ESMA" published_in: "ESMA Q&A tool" evidence: prepared_by: "Answer provided by the European Commission" locator: "ESMA Q&A entry ESMA_QA_1270, first line of the answer field" document_type: "qa_answer" legal_nature: "not_legislation" addressees: "not stated in the document" dates: published_on: "2023-06-02" question_submitted_on: "2023-06-02" locators: published_on: "ESMA Q&A Excel export ESMA_QA_1270, column 'Esma responses', date line" question_submitted_on: "ESMA Q&A Excel export ESMA_QA_1270, column 'Date of submission'" lifecycle_label: "Answer Published" --- **Answer prepared by the European Commission, published in the ESMA Q&A tool · not legislation · published 2 Jun 2023 [Answer Published]** *Answer Published · ESMA Q&A register, 2 June 2023 · Checked against the ESMA publication on 26 Oct 2026 · [Official source](https://www.esma.europa.eu/publications-data/questions-answers/1270)* | | | |---|---| | **Full title** | ESMA Q&A 1270 — Q&A — Settlement in e-money tokens \[Answer Published\] | | **Prepared by** | European Commission | | **Published by** | ESMA, in the ESMA Q&A tool | | **Reference** | ESMA_QA_1270 | | **Document type** | Q&A | | **Legal nature** | Not legislation | | **Addressees** | Not stated in the document | | **Dates** | Published 2 June 2023; question submitted 2 June 2023 | | **Legal basis** | DLT Pilot | | **Related instruments** | None recorded | | **Text on this page** | Word for word — the full text of the ESMA publication | **Settlement in e-money tokens** ### Question Should ‘e-money tokens’ under the DLTR be interpreted under the MiCA definition of ‘e-money tokens’? Could settlement in e-money tokens be used by DLT MI operators even before MICA starts applying? Does the issuer of the e-money tokens have to be authorised under EMD? Is it correct that a DLT SS/TSS operator does not need an authorisation as a credit institution or payment services institution if it uses e-money tokens for cash settlement that are issued by a duly authorised institution? Would e-money tokens used for settlement on a DLT market infrastructure be allowed to be issued on a distributed ledger other than that used by the DLT market infrastructure? *** ### Answer \[ESMA70-460-189 - Heading 9 - Question 1\] Answer provided by the European Commission in accordance with article 16b(5) of the ESMA Regulation. Until proposed Regulation on Markets in Crypto-assets (MICA) is adopted and applicable, e -money tokens referred to in Article 5(8) of the DLTR should be interpreted to mean electronic money that has been issued in compliance with Directive 2009/110/EC (E-money Directive, EMD). Electronic money tokens issued in that manner may be used by operators of DLT market infrastructures even before MICA applies. However, once MICA starts applying, the notion of e-money tokens under the DLTR should also be interpreted in light of that Regulation, which will comprehensively regulate the issuance and use of e-money tokens. The issuer of e-money tokens should be authorised under the EMD as an electronic money institution or as a credit institution under Directive 2013/36/EU. In accordance with Article 5(8), fifth subparagraph, of DLTR, services related to e-money tokens that are equivalent to the services listed in Section C, points (b) and (c) of the Annex to CSDR, must be provided by the operator of a DLT SS or a DLT TSS in accordance with Title IV of the CSDR or by a credit institution. Furthermore, Article 5(8) DLTR explicitly permits that e-money tokens are used by a DLT SS or a DLT TSS as a means of settlement of transactions related to DLT financial instruments under certain conditions. The DLTR does not require that e-money tokens used for settlement on a DLT market infrastructure must be issued on the same distributed ledger as the one used by the DLT market infrastructure to trade or settle DLT financial instruments. Therefore, DLT market infrastructures are free to use distinct distributed ledgers for the ‘cash’ and the ‘asset’ leg of the transaction. Disclaimer in relation to the answers provided by the European Commission in accordance with Article 16b(5) of the ESMA Regulation: these answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts. *** **Source:** [ESMA original document](https://www.esma.europa.eu/publications-data/questions-answers/1270)