A CFO transferring a significant amount of operating liquidity to a new account usually asks the same question — often quietly: If this provider isn't a bank, where does my money actually end up? It's a fair question. The answer is more structured than many expect — and understanding that structure is critical.
When you hold funds with a licensed E-Money Institution (EMI), they don't sit on the EMI's balance sheet alongside its operating capital. That's the key difference from an unregulated payment service provider. Under the regulatory framework for e-money institutions, customer funds must be held separately — in segregated accounts at authorized credit institutions. This process is called safeguarding.
The Safeguarding Model: How It Works
When a company holds funds with an EMI, they do not become part of the EMI's operating assets. Instead, they must be held in segregated accounts at licensed credit institutions in accordance with the requirements of the E-Money Directive. These accounts are exclusively designated for customer funds and must not be commingled with the EMI's own funds.
Tantum AG operates as an e-money institution under a license from FMA Liechtenstein (Financial Market Authority). The FMA is Liechtenstein's financial regulator and operates within the EEA regulatory system. This means: Tantum's safeguarding obligations are not an internal policy, but a licensing requirement that is continuously monitored by the regulator.
The safeguarding model is not a voluntary best practice. It is a binding requirement that applies to e-money institutions across the EU and EEA. The segregated accounts are regularly reconciled, and the segregation obligation is reviewed through audits and regulatory inspections.
For CFOs managing operating accounts, foreign currency settlements, or mass payouts across multiple legal entities, this structure is central. You are not exposed to the same credit risk as with an unregulated payment processor or a fintech in less supervised jurisdictions.
The Difference from a Bank Deposit
With a licensed bank, your deposit sits on the bank's balance sheet and is protected by the applicable deposit guarantee scheme. The bank can lend against those deposits — that's part of its business model.
With a regulated EMI subject to safeguarding obligations, your funds are held in separate accounts at partner credit institutions and cannot be used for the EMI's own business activities or lending. They are not commingled with the EMI's own funds.
Should an EMI enter insolvency proceedings, the safeguarded customer funds sit outside the general insolvency estate. The structure was deliberately designed to protect customers in precisely this scenario. This is not a workaround or marketing construct — it is a consciously designed regulatory architecture for e-money institutions throughout the EU and EEA.
Another difference: deposit guarantee schemes (as they apply to banks) typically cover amounts up to a certain maximum — such as €100,000 per depositor. Safeguarding, however, applies to the full amount held with the EMI, regardless of size.
This does not mean that EMIs are 'better' or 'safer' than banks — they are structured differently. For companies that hold high operating liquidity or regularly move large amounts, however, this structure can offer clear advantages.
What This Means for Your Operating Liquidity
Your funds are held in accounts expressly designated for customer funds — at regulated banks acting as partner credit institutions. These accounts are regularly reconciled in accordance with the requirements of the EMI licensing framework and are subject to ongoing supervision by the competent authority.
For a CFO managing operating accounts, processing foreign currency settlements, or handling mass payouts across multiple legal entities, this is of practical relevance. You do not bear the credit risk of the EMI itself — at least not in the form that would exist with an unregulated payment service provider or a fintech in less supervised jurisdictions.
If your company regularly receives and disburses multi-currency payments in EUR, USD, GBP, or CHF, you are likely holding significant balances in your accounts at any given time. In that case, the question of where and how these funds are held is not an academic exercise — it affects your operational security and risk management.
With a regulated EMI like Tantum, you receive dedicated IBANs in multiple currencies issued in your company's name. The funds held in these accounts are safeguarded according to the rules described. This is not just a contractual assurance — it is a regulatory obligation monitored under the FMA license.
For companies in industries frequently rejected by traditional banks or served only under high barriers — such as Web3, crypto VASPs, affiliate networks, gaming operators, or cross-border B2B platforms — this structure offers a clear, transparent alternative.
What Regulatory Requirements Apply
The regulatory requirements for e-money institutions are uniformly defined across the EU and EEA. The Second E-Money Directive (2009/110/EC) stipulates that EMIs must protect customer funds either through safeguarding (segregation at licensed credit institutions) or through insurance or a comparable guarantee. In practice, the safeguarding model is predominantly used.
The European Banking Authority (EBA) has published supplementary guidelines specifying how safeguarding must be implemented in practice: separate accounts, regular reconciliation, clear designation of accounts as customer funds, and strict separation from the EMI's own funds.
With the introduction of the MiCA Regulation (Markets in Crypto-Assets Regulation), this framework is being further specified for crypto-asset service providers. MiCA requires VASPs and issuers of e-money tokens, among other things, to hold customer funds segregated at licensed institutions — a principle very similar to EMI safeguarding.
For companies handling both traditional payments and crypto transactions, choosing a regulated, MiCA-compliant partner is therefore becoming increasingly important. The regulatory convergence between EMI requirements and MiCA provisions creates a clear, uniform standard for the custody of customer funds in Europe.
Liechtenstein — though not an EU member — is part of the EEA and has fully transposed the E-Money Directive into national law. This means: An EMI licensed in Liechtenstein is subject to the same safeguarding obligations as an EMI in Germany, France, or the Netherlands. Additionally, it benefits from EEA passporting, which allows it to offer services in all EU and EEA states without needing to obtain separate licenses.
The Questions You Should Ask Every Provider
Before transferring operating funds to an institution that is not a bank, you should ask three questions directly — and expect clear answers.
First: Where exactly are customer funds held, and at which institutions? A reputable EMI can tell you precisely at which licensed credit institutions the segregated accounts are maintained. If the answer remains vague or refers to 'partner networks' without naming specifics, you should follow up.
Second: How are these accounts designated and reconciled? Are they clearly marked as customer funds? How often does reconciliation occur? What processes are in place to ensure that segregation is maintained at all times? These questions touch the core of the safeguarding model — and a regulated EMI should be able to answer them without hesitation.
Third: What happens to your funds if the provider encounters financial difficulties? Under a properly structured safeguarding model, customer funds sit outside the insolvency estate. They are not part of the assets to which general creditors have access. If a provider cannot answer this question clearly — or evades it — that's a warning sign.
If you are evaluating as a CFO or founder where to hold your operating liquidity, receive customer payments, or process multi-currency settlements, it's worth not only asking these questions but also verifying the answers. The Tantum Corporate Accounts are built precisely around this kind of transparency. We explain precisely how your funds are held, what protections apply, and how the structure aligns with your business requirements.
The safeguarding model is not a marketing claim — it's a regulatory obligation that applies to all licensed e-money institutions in the EU and EEA. For CFOs and finance leaders who want to understand where their money actually sits and what protections apply, this understanding is central.
If you have questions about the custody of your operational funds or want to assess how a regulated EMI fits into your treasury structure, speak with our team. We disclose the structure openly — without detours.
Tags: #emi#safeguarding#customer-funds#regulation#fma#mica