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With MiCA now live, what changes should crypto users and investors expect when using platforms or buying tokens in the EU?
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MiCA fully comes into force
On December 30, 2024, the European Union rolled out the Markets in Crypto-Assets framework, setting a unified rulebook for the EU crypto industry.
The journey began on April 20, 2023, when the EU Parliament adopted MiCA to tackle issues like fraud, market collapses, and the lack of investor protection that had long troubled the fast-growing crypto space.
Before MiCA, crypto businesses faced a patchwork of national regulations. Some countries encouraged innovation, while others threw up roadblocks. MiCA changes that by replacing fragmented rules with a single, harmonized framework for all 27 EU member states.
Meanwhile, across the Atlantic, the U.S. is preparing for a crypto shake-up of its own. President-elect Donald Trump, set to begin his second term on Jan. 20, has declared his intention to make America the “crypto capital” of the world.
In a series of high-profile appointments, Trump has tapped Silicon Valley veteran David Sacks as the White House’s AI and crypto “czar,” alongside Bo Hines, the newly named executive director of the Presidential Council of Advisers for Digital Assets. Together, they aim to guide the U.S. toward crypto dominance.
As crypto momentum gains pace, what does this mean for the industry, for companies, and for the millions of investors? To answer that, let’s break down the core of MiCA, why it was brought in, and how it’s reshaping the game.
What exactly is MiCA, and why was it introduced?
MiCA’s purpose is to regulate the crypto sector like any other major financial industry while boosting innovation. The framework focuses on three key areas—issuance of crypto-assets, services provided by crypto platforms, and stablecoins—bringing much-needed structure to a once-chaotic environment. Here’s how it works:
Issuance and offering of crypto-assets
MiCA sets the gold standard for transparency. Companies issuing tokens—whether exchange tokens like Bitcoin (BTC), utility tokens, or stablecoins—must disclose their business models, risks, and governance structures. This ensures that investors aren’t left guessing about what they’re putting their money into.
Regulation of crypto service providers
Platforms like exchanges and wallets, which serve as the backbone of the crypto ecosystem, now have to register with the European Banking Authority. They must meet rigorous standards for security, governance, and risk management. These measures not only protect users but also elevate the credibility of the entire sector.
Stablecoins (ARTs and EMTs):
Stablecoins, such as asset-referenced tokens and electronic money tokens, face the toughest scrutiny under MiCA. Issuers must maintain sufficient reserves, implement buyback mechanisms, and comply with strict disclosure requirements.
Starting June 30, issuers of ART and EMT will need to provide sustainability disclosures. By the end of the year, crypto service providers must also begin requesting these disclosures as part of the new requirements.
Why now?
MiCA arrives at a time when crypto has outgrown its “Wild West” reputation. The sector has matured into a multi-trillion-dollar industry with real-world implications for finance, technology, and even geopolitics.
Yet, its rapid growth has exposed vulnerabilities—scams, unstable markets, and a lack of investor protection. MiCA addresses these challenges head-on by focusing on these key goals.
Failure to comply with MiCA’s requirements won’t be taken lightly. Companies risk hefty fines, and non-compliant entities may even face operational bans across the EU.
For some, this will mean rethinking their strategies entirely. For others, MiCA represents an opportunity to operate in one of the most secure and transparent crypto markets in the world.
How crypto companies are adapting to MiCA
The rollout of the MiCA regulations has prompted a wave of activity across Europe’s cryptocurrency industry. Companies are adjusting to the new framework, with some securing licenses to operate under the stricter rules, while others face compliance uncertainties.
Four companies have already secured their MiCA licenses in the Netherlands, granting them the ability to operate across the EU’s 27 member states. The licenses were issued by the Dutch Authority for the Financial Markets. The companies include:
- MoonPay, a crypto payment platform, is now equipped to offer its services across the EU.
- BitStaete, a digital asset management firm, which can expand its reach to institutional and retail investors.
- ZBD is a fintech company leveraging Bitcoin’s Lightning Network for fast and low-cost transactions.
- Hidden Road is a prime brokerage and clearing firm focused on institutional crypto services.
The four companies join the ranks of firms like Circle and Socios.com in obtaining regulatory approval through the EU’s new framework.
However, not all companies have had a smooth transition under MiCA. In mid-December, U.S.-based crypto exchange Coinbase delisted Tether (USDT), citing compliance concerns with MiCA’s requirements.
Despite the delisting, USDT remains available on other European exchanges, though its market capitalization has dropped by over 1% since MiCA came into force. USDT’s market cap, which was $141 billion on Dec. 19, has since fallen to $137.5 billion as of Jan. 8.
The lack of clear regulatory guidance from EU authorities has left many exchanges in a wait-and-see position regarding USDT’s compliance.
Tether, as the largest stablecoin issuer, faces increasing scrutiny over its reserve transparency. The impact of MiCA on its operations and those of similar issuers remains a critical area to watch as the regulation takes hold.
Expert insights: What MiCA means for crypto companies
With MiCA now in full force, crypto companies across the EU are bracing for changes. To gain deeper insights into the practical challenges and opportunities presented by this landmark regulation, crypto.news reached out to industry leaders who shared their thoughts on the immediate implications, long-term impacts, and potential hurdles in implementation. Here’s what they had to say.
Operational and financial overhaul
MiCA’s implementation has placed high demands on crypto companies, requiring substantial changes to their internal operations. From compliance upgrades to resource reallocation, the regulation is forcing businesses to restructure to meet its requirements making it a costly affair.
Daria Morgen, Head of Research at Changelly, summarized the magnitude of these changes:
“MiCA’s operational demands extend beyond simple policy adjustments—they represent a structural transformation for many crypto companies. Businesses will need to overhaul compliance teams, refine financial workflows, and invest heavily in advanced reporting systems.”
Similarly, Chuck Zhang, CFO at PolyFlow, pointed to the financial burden associated with these changes:
“Immediate impacts are going to be a significant amount of operations/reporting/compliance cost for operators in this space. The licensing requirements are stringent, but it does cover all EU member states. The reserve and liquidity adequacy is meant to provide a stable financial system and protect daily users, but will introduce more cost for companies in terms of its internal capital management.”
For companies registered in countries like Poland and Czechia, which previously offered relatively lenient registration processes, the challenges are even more pronounced. Slava Demchuk, CEO of AMLBot, explained:
“Currently, it’s relatively easy to secure VASP registration in certain EU countries with minimal requirements, but this will change in 2025. Many of these companies will not be able to meet MiCA’s uniform requirements. Based on past experiences in Estonia, where stricter rules led to the loss of around 1,500 VASP registrations, similar challenges are likely across the EU.”
Relocation vs. retention
MiCA’s comprehensive framework has sparked debate over whether crypto companies might relocate to less regulated jurisdictions like the UAE, UK, or USA. The decision to stay or move often hinges on the size and resources of the business.
Morgen believes the EU’s stability will keep established players rooted, despite the allure of friendlier regulatory environments:
“Yes, MiCA’s strict compliance requirements may push some crypto businesses to consider relocating to jurisdictions like the UAE, UK, or USA. However, the EU’s unified market and legal certainty remain strong incentives for established players to stay. While smaller firms might explore relocation, major players are more likely to adapt.”
Zhang agrees but talks about the challenges smaller companies face.
“This is going to hit small players a lot more as they aren’t equipped to handle the compliance and operational costs. I do expect some operators exiting to less stringent locales, but I hope the EU fosters a collaborative regulatory environment to retain innovation.”
MiCA’s effect on innovation
A critical question is whether MiCA will stifle or stimulate innovation within the EU. While some see the regulation as a pathway to stability, others worry it may discourage experimentation, particularly for startups with limited resources. Morgen highlighted this dual-edged nature:
“MiCA holds the potential to create an environment where long-term innovation in the EU crypto sector can flourish. But compliance costs and strict oversight might slow down experimentation, especially for smaller startups that lack resources.”
Zhang added that while regulatory clarity is valuable, overregulation could have unintended consequences:
“In the long run, a collaborative and well-defined regulatory framework will bring stability to the crypto space. However, the short-term pain could include a brain drain, as smaller innovators might struggle to thrive under MiCA’s costs and complexities.”
Friction in implementation
Although MiCA aims to unify crypto regulations across the EU, its success depends on how well member states align with the framework. Experts expect delays and inconsistencies in its rollout, which could create an uneven compliance landscape. Morgen pointed to the challenges larger companies may face:
“Larger companies could struggle with cross-border inconsistencies, as some EU member states lag in aligning their national legislation with MiCA standards. This could create an uneven compliance landscape.”
Zhang highlighted the lack of precedent and expertise, which adds another layer of difficulty.
“The relatively new nature of the regulation means there’s a lack of legal precedence and experts in navigating the rules. For crypto, both operators and regulators are relatively new to this, so there’s going to be a lot of discovery and conflicts as they figure it out along the way.”
A long road ahead
Ultimately, MiCA’s impact on Europe’s crypto sector will depend on how effectively companies adapt and how consistently the regulation is enforced across member states.
MiCA will standardize compliance requirements across the EU, which is a huge positive. But many smaller VASPs may not survive the transition, especially those in countries where lenient registration processes previously prevailed.
While MiCA’s long-term benefits include clarity and stability, the road to compliance is fraught with challenges. Whether the EU can strike the right balance between oversight and innovation will determine how the regulation shapes the future of the crypto industry.
This article first appeared at crypto.news
