Everything You Need to Know About MiCA: The EU’s Crypto Regulation
The cryptocurrency industry is rapidly transforming in hopes of widespread adoption—something which the EU has taken to heart with new regulations that took effect in January 2025.
But what is MiCA, and what does it mean for cryptocurrency companies? We have all the answers in this blog article, so keep reading.
What is MiCA?
MiCA is an acronym that stands for “Markets in Crypto-Assets,” and it is a regulation that was passed by the European Parliament in 2023 for the purpose of protecting EU citizens from cryptocurrency scams.
Although it was passed in 2023, it had a 12-18 month plan for implementation, and the process began on June 2024 to come to fruition in January 2025, when the regulations officially began being enforced.
What Does MiCA Mean for Crypto?
MiCA was established in order to protect individuals from scams in the cryptocurrency space, and honestly, we believe it was a move in the right direction for widespread cryptocurrency regulation.
While the requirements enforced under this regulation do make it more difficult to enter the cryptocurrency space as a new company, we find that all the rules established are reasonable and do serve to protect individuals from obvious scams in the cryptocurrency space.
It’s important to note, however, that while MiCA can regulate officially registered cryptocurrency companies to ensure they meet certain requirements in order to be registered in the EU, they can do nothing to police companies in other countries—other than to prevent the sale of those tokens on official channels.
Below are the requirements for cryptocurrency companies, applying to everything from stablecoin blockchains to crypto trading platforms.
Requirements for Crypto Companies Under MiCA:
· Publish a whitepaper in a specified format
· Meet specific technical requirements
· Have an authorization regime (only for stablecoins)
· Regular audits
· Meet liability specifications
· Have protections to prevent conflicts of interest and insider trading
· Registration in one EU state (though the registration can be moved)
· Method for handling customer complaints
As you can see, these requirements seem to be reasonable and are things you should look for prior to investing in a cryptocurrency company anyway. However, you may have also noticed that all of these require a financial investment upfront, meaning smaller start-up blockchains may not be able to meet the requirements needed to operate within the EU.
What Impacts Has MiCA Had Within the EU Already?
Just like with any regulatory development, we expect MiCA to have both positive and negative effects on the cryptocurrency industry. Because this is a new regulation that just took effect, we can’t say for sure what will happen, but below are the positive and negative outcomes we expect to see over the next few years.
Positive Effects of MiCA
The purpose of MiCA was to give existing financial institutions a safe space in which to digitize their products. MiCA was written to encourage the tokenization of assets as well as a digital ID used for banking purposes.
Even though this regulation is new, we do expect it to help, as it allows companies to expand into the blockchain space without having to worry about being shut down by regulatory bodies. It also provides them with a road map to ensure that as they innovate, customer data is safe.
Speaking of safety, MiCA was designed to help make the cryptocurrency and blockchain realm safer for consumers. While it can’t guarantee complete safety, we do think it will make it harder for malicious actors to take advantage of the marketplace.
Additionally, we hope that this regulation will further education in the space so that a lot of the stipulations currently surrounding cryptocurrency and its possible uses will be rectified.
Negative Effects of MiCA
Unfortunately, there is a dark side to every moon, and in this case, we believe the regulation may favor centralization, something which will be a bit sad for an industry that started on a decentralized path.
The new regulations make it difficult for an EU citizen to promote any start-up project that doesn’t meet these regulations, and it’s impossible to meet them without a centralized body overseeing the technology. Therefore, while we might get more options in terms of alternative banking, we doubt any of them will be truly decentralized. (Bitcoin isn’t going anywhere, don’t worry! MiCA just makes it harder for cryptocurrencies similar to Bitcoin to rise to prominence.)
To add to that, many countries and companies within the EU are of the stance that the process of maintaining MiCA regulations is too difficult, and as such, some entities have gone toward the route of a ban instead.
The first example of this is Banco de Investimentos Globais (BiG), one of Portugal’s largest banks. Rather than using the regulation to expand into the space, they have decided to simply block any transaction that would convert fiat to a cryptocurrency. Although other banks in Portugal currently allow these transfers, this does make us worry about the future of the crypto industry in Europe.
How Will MiCA Affect Countries Outside of the EU?
The MiCA regulations only apply to EU member states, which does not include Switzerland, which is Schengen but not EU. Notably, Switzerland already has a regulation similar to MiCA which it implemented in 2021, so we don’t expect much to change there.
Across the ocean, the United States has been cracking down on cryptocurrency companies over the past few years, and while we can hope that something similar to MiCA might be established in the United States, based on the current state of government affairs, we expect it is a long way off.
On the other side, we have Russia and China, both of which have outlawed cryptocurrency entirely, so we doubt anything like MiCA will be established there.
As for the rest of the world, we are less knowledgeable, however, we hope MiCA can serve as a blueprint to help lead to more comfortable and safe adoption of blockchain technology in industries around the world.
