Understanding eIDAS Impact on Banking and Payments

What is eIDAS?

eIDAS stands for Electronic Identification, Authentication and Trust Services. It is European Union law — originally enacted in 2014 (eIDAS 1.0) and substantially revised in 2024 (eIDAS 2.0, formally Regulation 2024/1183) — that creates a legal framework for digital identity across all 27 EU member states.

The core ambition is straightforward: a citizen in Portugal should be able to use their national digital identity credential to authenticate with a German bank, a French hospital, or a Dutch government portal — and that credential should carry legal standing equivalent to a physical ID card.

eIDAS 2.0 goes further. It mandates that every EU member state must offer at least one European Digital Identity (EUDI) Wallet — a mobile application in which citizens store and selectively disclose certified attributes: their national eID, driving license, professional qualifications, and eventually bank account credentials or KYC attestations.

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Proposed Stablecoin KYC Rule

The Fed/FinCEN and OFAC just revealed their proposed Stablecoin KYC rule and consistent with the GENIUS Act it entails bank-level KYC requirements for Stablecoin Issuers (see blog: No more Stablecoin “rewards”). This combined with the 303-page FinCEN/OFAC rule on transaction monitoring and secondary uses places substantial compliance burdens on Stablecoin issuers. So much that it is said the hottest job in Fintech is in Stablecoin compliance.

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