Wallet as a service vs a regulated wallet service: what EU businesses need under MiCA

Wallet as a service, often shortened to WaaS, lets a business offer wallets to its clients through an API instead of building the wallet and custody technology itself. But not every WaaS is the same. Some provide the technology only, leaving the business to handle the regulatory side. A regulated wallet service provides the same technology inside a regulated framework, with custody held under an authorisation. For businesses operating in the EU under MiCA, that distinction is the one that matters.

What a wallet as a service provides

A wallet as a service gives a business wallet and custody infrastructure through an API: the ability to create wallets, hold balances and move value, without building that technology in-house. It solves the engineering problem of setting up wallets and key management.

Where technology-only stops

A technology-only wallet service provides the software, but the regulatory responsibility for holding and safeguarding client assets can still sit with the business using it. That means the business may need its own authorisation to custody crypto-assets, or to work out how the regulatory side is covered. The technology is only half of what operating in a regulated market requires.

What a regulated wallet service adds

A regulated wallet service provides the wallet and custody technology inside a regulated framework, where the custody of crypto-assets is held under an authorisation. For a business in the EU, this is the difference between buying technology and accessing a service that already sits within MiCA. It means the regulated custody is covered, rather than left for the business to solve.

Why this matters under MiCA

Under MiCA, custody and administration of crypto-assets is a regulated activity. A business that offers wallets to EU clients needs that activity to be covered by an authorisation, its own or a partner's. A regulated wallet service is the route that builds the authorisation in, rather than leaving the business to obtain one. This connects to the broader question of stablecoin infrastructure and who carries the regulated layer.

Where Damex fits

In respect of servicing within the EU, Damex Digital Ltd is authorised by the Malta Financial Services Authority as a Crypto-Asset Service Provider and a Financial Institution under MiCA and the FIA, and custody of crypto-assets is provided within that regulated framework. IBAN and e-money services are provided in conjunction with partners.

Frequently asked questions

What is the difference between wallet as a service and a regulated wallet service?

A plain wallet as a service provides the wallet and custody technology. A regulated wallet service provides that technology inside a regulated framework, with custody held under an authorisation.

Why does the regulated distinction matter under MiCA?

Under MiCA, custody of crypto-assets is a regulated activity. A business offering wallets to EU clients needs that activity covered by an authorisation, so a regulated wallet service builds that in rather than leaving it to the business.

Does a technology-only wallet service mean I need my own licence?

It can, because the regulatory responsibility for custody may sit with the business using the technology. A regulated wallet service is designed to cover that.

Can I offer wallets to EU clients through a partner?

Yes. A regulated wallet service lets a business offer wallets while the custody sits within the partner's authorisation.

Disclaimer

This article is for information and discussion purposes only. It does not constitute financial, investment, tax or legal advice, and should not be relied upon as such. Crypto-assets and stablecoins carry risk, including the risk of loss. Availability of Damex services depends on your jurisdiction and is set out in the relevant terms and conditions. Services are provided by different Damex entities under different regulations by region.