As the European Commission’s MiCA review consultation closes, Europe must decide whether its crypto rulebook is protecting the market without making it too costly to build in.
When the Markets in Crypto Assets Regulation (MiCA) came into force, it did something that had eluded the digital asset sector in Europe for years: it created a single, coherent rulebook.
For the first time, a crypto asset service provider (CASP) authorized in one Member State can passport its services across the European Union and European Economic Area, and clients across the bloc can choose among a growing field of licensed, supervised providers. That is a genuine achievement, and one the industry should not take for granted.
As the consultation on MiCA’s review closes, the focus should now be on calibration: keeping what works, and being honest about where the compliance burden has grown faster than the risks it is meant to address.
Start with what MiCA got right. Before it, a firm wanting to operate across Europe faced a patchwork of national regimes, divergent registration requirements, and, in some markets, no bespoke regime at all.
A unified market changes the economics of building a serious business. It lets providers invest in one authorization and one compliance architecture rather than 30, and it gives customers something they genuinely benefit from: choice among multiple providers competing on quality, price, service and security, all held to a common standard.
Related: MiCA is coming for DeFi vaults, but regulation will be difficult
Passporting is the mechanism that turns 30 fragmented markets into one addressable market of roughly 450 million people, and it is the single strongest reason for a globally mobile industry to build in Europe rather than elsewhere.
Consultation on MiCA’s review closes Sept. 30. Source: European Commission
MiCA has raised the barrier to entry by imposing a more demanding authorization and compliance framework. In return, however, an authorized CASP gains access not merely to a single Member State, but to the entire EU single market.
The relevant question for the review is therefore whether the obligations for market access remain proportionate to the scale of the market they unlock.
The principle that should guide the review is straightforward: regulation should apply where there are real risks to market participants or to market stability, and it should be proportionate to those risks.
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