MiCA transition period ends as crypto firms in the EU must now hold full authorisation

The transitional period under the European Union's Markets in Crypto-Assets regulation, known as MiCA, has come to an end. Crypto-asset service providers that were operating under national regimes must now hold a MiCA licence to continue serving customers in the EU.

MiCA was adopted in 2023 and has applied in stages. Rules for stablecoin issuers took effect in mid-2024, and the rest of the framework, including requirements for exchanges and custodians, applied from the end of that year. Member states could allow existing firms to continue operating for up to 18 months while they applied for authorisation, and some countries chose a shorter period.

A MiCA licence obtained in one member state allows a firm to offer services across the EU, a feature known as passporting. That has led to competition between national regulators and questions about consistent supervision.

The regime covers several areas:

• Capital, governance and custody requirements for service providers
• Reserve and redemption rules for stablecoins
• Rules against market abuse and requirements for token white papers

Some firms have reduced their services in Europe or delisted certain stablecoins that do not comply. The EU presents MiCA as a model of comprehensive regulation. Its effects on competition, innovation and consumer protection will be watched closely, especially as the US implements its own stablecoin law.