Understanding e-money and digital assets in a fragmented financial landscape
As digital finance becomes increasingly mainstream, the lines between e-money (electronic money) and digital assets are blurring. These terms are often used interchangeably, yet their legal, regulatory, and operational implications are very different.
For companies scaling across borders, this difference can mean the line between compliance and penalties, or between growth and stalled market entry. Bruc Bond® helps businesses navigate this complexity. Our banking platform, combined with deep regulatory expertise, ensures clients can issue, manage, and scale digital finance solutions securely, wherever they operate - whether they are issuing e-money, managing digital assets, or operating in multiple jurisdictions.
What is e-money and how is it regulated?
E-money accounts store funds digitally, allowing users to pay via cards, phones, or other devices. Offered by regulated providers, they often support services like transfers and multi-currency payments, with funds backed by 1:1 by real currency.
Unlike banks, e-money providers cannot lend your money and must safeguard it in separate accounts or low-risk investments. Benefits include fast setup, low fees, and digital tools, but they may lack lending, cheque handling, or government-backed deposit protection.
The regulation of e-money varies by country or region, but the core principles are generally similar across worldwide frameworks. Providers must be licensed by financial authorities in their country and must follow rules around safeguarding customer funds, usually holding them in separate accounts or low-risk investments.
Unlike banks, they cannot lend these funds. Regulations also require compliance with anti-money laundering (AML) and know-your-customer (KYC) standards, as well as maintaining minimum capital to ensure financial stability.
Understanding digital assets and stablecoins
Digital assets are different. They exist purely in their digital form, for example, cryptocurrencies and digital tokens such as stablecoins and NFTs (non-fungible tokens). These assets are built on blockchain technology – a decentralised digital database that allows these assets to be used for investment, trading, or digital ownership.
Stablecoins are unique in that they are pegged to currencies like the US dollar or euro. They offer price stability in a volatile crypto market. For businesses seeking faster, more predictable international transactions, they could be transformative. However, regulation remains fragmented. Frameworks like the EU’s MiCA, the U.S. GENIUS Act, and Hong Kong’s digital asset rules vary widely, from reserve requirements and redemption rights to custody and licensing standards, reflecting differing national strategies.
- MiCA takes a comprehensive approach rooted in EU governance, applying strict rules around 1:1 reserve backing, auditing, and legal segregation of e-money tokens and asset-referenced tokens.
- Hong Kong narrows its scope to fiat-referenced tokens, requiring local custody and applying investment governance principles to platforms operating within its borders.
- The U.S. GENIUS Act introduces a federal licensing regime, mandating fully reserved backing in high-quality liquid assets and ensuring consumer redemption rights - but focusing solely on payment stablecoins.
The resulting landscape is complex for cross-border businesses, creating duplicated compliance, higher costs, and slower market entry.
Bruc Bond® simplifies this complexity, managing international banking relationships and delivering tailored, compliant solutions to help businesses navigate EU, U.S., and Asian regulations with confidence.
Why the distinction matters for compliance and growth
Understanding the difference between e-money and digital assets is crucial for businesses to stay compliant and grow. Each is regulated differently, with specific rules around licensing, customer protection, and how funds are handled. Treating them the same instead of as separate entities can lead to financial institutions incurring legal issues and resulting fines.
Without clarity, businesses face inconsistent compliance burdens that slow scale and invite risk. Bruc Bond® bridges this gap, ensuring each entity is structured, classified, and regulated appropriately.
Operational blockers in the cross-border payments
Without harmonised standards for e-money and digital assets, using them across borders becomes complicated, costly, and risky. It can lead to legal confusion, increase the chances of fraud, and make it harder for businesses to grow internationally. Harmonised rules and standards help to protect consumers, support innovation, and make digital finance work smoothly worldwide.
Complexity carries a cost, particularly when businesses manage multiple accounts across fragmented jurisdictions. Acting as a single point of contact, Bruc Bond® simplifies this process, removing the friction of managing global payments and streamlines transactions. Through our OSKAR platform, businesses gain centralised oversight of balances, transactions, fees, and reconciliations in a fully adaptable interface designed for cross-border operations.
How Bruc Bond® can support your business with cross-border payments
At Bruc Bond®, we make global corporate banking simple, secure, and seamless. By managing complex international banking relationships and connecting businesses to a trusted network of partner banks, we help streamline cross-border operations.
With deep regulatory expertise and a transparent fee model, our services are designed for institutions that demand both operational excellence and strategic foresight. We provide your business or SME with a reliable gateway to efficient, multi-jurisdictional banking.
Speak with Bruc Bond® today, and let’s build a strategy that supports your growth. Contact us now.
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