Electronic Money Supervisory Commission

Regulatory Topics

EMSCOMM on European Central Bank

European Central Bank (ECB) published a report entitled ‘Report on Electronic Money” dated August 31, 1998.

The EU central banks studied the phenomenon of electronic money in 1993, which at that time only involved prepaid cards. The results of their analysis were published under the aegis of the EMI (European Monetary Institute) in May 1994. In that report the central banks welcomed the development of electronic money products as this would improve efficiency in payment operations for all parties involved, but recommended that, for a number of reasons, only credit institutions should be allowed to issue multi-purpose prepaid cards.

European Central Bank (ECB) sets minimum requirements in regards to ensuring monetary policy effectiveness and a level playing-field and in order to address the regulatory concerns outlined be fulfilled:

    • issuers of electronic money must be subject to prudential supervision;


    • issuance must be subject to solid and transparent legal arrangements, technical security, protection against criminal abuse and the reporting of monetary statistics;


  • issuers of electronic money must be legally obliged to redeem electronic money against central bank money at par at the request of the holder of the electronic money; and

  • the possibility must exist for the ECB to impose reserve requirements on all issuers of electronic money.

In addition to the minimum requirements outlined above, are the two further objectives which it is deemed desirable to pursue:

    • the interoperability of electronic money schemes and;


    • the adoption of adequate guarantee, insurance or loss-sharing.


Public authorities should ensure that electronic money schemes meet the minimum requirements set out in the Report. Two functions, namely payment systems’ oversight conducted by central banks and prudential supervision, will contribute to the pursuit of this objective. Overseers and supervisors should co-operate closely in order to exploit possible synergies.

Given the world-wide aspects of the issuance of electronic money, in particular if it is to be transferred via telecommunications networks such as the Internet (network money), which carries the risk of delocation, the ECB emphasis the need for international co-ordination in this field.

The concept really began to be put into practice with the EU Electronic Money Directive of 2000, which created a legal foundation to passport e-money issuing in Europe.

Where there was no substantial regulation between the first EU Electronic Money Directive of 2000 and the second in 2009, current regulations that have dramatic implications on e-money companies come thick and fast.

The commission contributes substantial resources to this research and to the implementation of e-money in Europe. Even though that the commission was started late 2016, the commission itself sent a team to represent during these studies and discussions on the matter to help EU and ECB to come up with a regulations to implement.