What is Markets in Crypto-Assets Regulation (MiCA)?

Markets in Crypto-Assets (MiCA) is the European Union’s first comprehensive law for crypto-assets. The regulation establishes a uniform EU-wide standard for issuing and trading crypto-assets and aligns them with traditional financial oversight.

MiCA’s primary objectives are to protect investors and the financial system while supporting responsible crypto innovation. The regulation safeguards consumers through clear disclosures and protections for retail users, ensures market integrity by addressing fraud, and promotes innovation by allowing authorized firms to operate across all EU member states with a single license. MiCA also addresses financial stability by imposing strict requirements on asset-referenced and e-money tokens.

These objectives are implemented through detailed requirements, such as mandatory white papers for each crypto-asset issuance, robust governance, capital buffers, and technical safeguards. Insider trading and market-manipulation bans are also extended to crypto transactions.

Scope and entities covered by MiCA

MiCA applies to issuers and service providers dealing with crypto-assets in the EU. It covers three main issuer categories: asset-referenced tokens (ARTs), e-money tokens (EMTs), and other crypto-assets such as utility tokens or non-stablecoin cryptocurrencies. Any company offering these tokens to the public in the EU or seeking to list them on EU trading venues must comply with MiCA rules.

The regulation also covers Crypto-Asset Service Providers (CASPs), which are firms that professionally offer crypto services to clients. This includes exchanges, trading platforms, custody providers, wallet services, brokers, advisory firms, portfolio managers, and crypto ATMs. These activities are similar to those covered by the Markets in Financial Instruments Directive for securities, but applied to crypto. MiCA defines three classes of crypto services requiring a license:

1. Retail services that execute or place orders, transfer assets, provide advice, or manage portfolios.
2. Wholesale services such as custody and exchange of crypto for cash or other crypto.
3. Crypto-asset trading platforms.

What categories are not covered by MiCA

Traditional financial institutions (banks, investment firms, central banks, etc.) can provide crypto services under their existing licenses, often via a simpler notification process. Crypto-assets that are really just tokenized securities or deposits (already covered by MiFID or banking law) are also outside MiCA. Non-fungible tokens (NFTs) are generally excluded unless they are part of a large collection of fungible-like tokens. Fully decentralized networks without a centralized service provider also fall outside MiCA’s scope.

Licensing and passporting

Under MiCA, any CASP operating in the EU must obtain a MiCA license from its home country’s regulator. This requires forming a company in an EU member state, maintaining an office there, and appointing at least one EU-based resident director. Once authorized, a CASP can offer its crypto services across the EU without separate approvals in each country. Crypto exchanges, trading platforms, and brokerage firms must apply for full authorization, while crypto banks or e-money institutions may use an expedited notification process based on their existing banking licenses, provided they meet MiCA’s crypto-specific requirements.

MiCA’s licensing is an ongoing obligation. Firms must continuously meet requirements for capital, governance, and risk management to retain their license. National authorities have published guidance to help firms meet these standards. For example, in January 2025, the European Securities and Markets Authority (ESMA) emphasized that crypto firms must have genuine substance and governance in the EU, including competent management and adequate staffing, before obtaining a license. Regulators stress that applications should be complete and submitted promptly, as errors or delays may result in approval setbacks or enforcement actions.

MiCA compliance requirements

Once authorized, CASPs must meet a broad set of ongoing obligations. MiCA’s framework includes requirements similar to those for banks or investment firms, adapted for the crypto sector. Key compliance obligations include:

Authorization and governance

The firm must remain established and supervised in the EU with an appropriate legal structure and a qualified management team. Changes in ownership or key personnel typically require regulatory notification. Providers must implement formal governance arrangements, including effective risk management frameworks, internal controls, and dedicated compliance functions to ensure ongoing oversight and decision-making quality.

Capital and prudential rules

MiCA sets minimum capital requirements based on the services provided. Basic services such as advising and order execution require at least €50,000 in capital, while operating an exchange platform requires €150,000. CASPs must also hold their own funds equal to a quarter of their fixed overheads. Licensed entities such as banks or e-money institutions may already meet these requirements under existing regulations, but dedicated crypto firms must ensure compliance with these specific minimums.

Risk management and controls

Firms must implement robust AML/CFT and cybersecurity measures, including customer due diligence (KYC), transaction monitoring, and reporting suspicious activity to authorities. MiCA aligns with existing EU anti-money laundering rules and introduces crypto-specific recordkeeping and reporting formats, such as standard data formats for trade records. CASPs must also ensure operational resilience by preparing for disruptions with business continuity and recovery plans, and by regularly testing security systems.

Transparency and disclosure

Any crypto-asset offered to the public must be accompanied by a comprehensive white paper. This document, similar to a prospectus, must clearly describe the asset, its issuer, technical details, risks, and token economics. MiCA-compliant white papers must follow a prescribed format and use machine-readable iXBRL tagging for core data. Marketing communications must be clear and not misleading. Issuers, especially of stablecoins, are liable for false statements in the white paper and must treat token holders fairly, such as by maintaining sufficient reserves and allowing redemption.

Stablecoin-specific regulations

For asset-referenced tokens (ARTs), MiCA requires a reserve of high-quality assets that fully covers the value of tokens, along with minimum own funds, such as at least €350,000 for smaller issuers. ART issuers must allow token holders to redeem tokens at market value or receive the underlying assets, and must plan for emergency scenarios to protect users. Only licensed credit or e-money institutions may issue e-money tokens (EMTs), which must be issued and redeemed at face value. Funds received must be safeguarded by holding them with a bank or investing in low-risk assets, and all token issuers must comply with white paper requirements and face civil liability for misstatements.

Implementation timeline

MiCA entered into force in 2023 and is being implemented in stages. Key dates are:

• June 30, 2024: Rules for stablecoin issuers (ARTs and EMTs) take effect. From this date, any new asset-referenced or e-money token must comply with MiCA’s issuance rules.
• December 30, 2024: The full MiCA regime for CASPs comes into force. Crypto exchanges, brokers, wallet providers, and others must be licensed under MiCA to continue operating.
• Through mid-2026 (transition period): CASPs that were legally active under national crypto laws on 29 Dec 2024 can keep operating without a MiCA license until they either receive a license or reach 1 July 2026, whichever is earlier. This “grandfathering” window gives firms up to 18 months to transition. Some countries have shorter deadlines, but July 1, 2026 is the EU-wide cutoff. After that, all crypto-asset services must be provided by licensed CASPs.

During implementation, the ESMA and the European Banking Authority (EBA) developed regulations and guidelines in 2024–25 for areas such as capital calculations, governance criteria, and white paper formats. By late 2025, most standards were finalized.

MiCA implementation in 2026

In 2026, MiCA moves from theory to practice. As national grace periods end, regulators require crypto firms to secure MiCA authorization or exit the market. For example, France’s financial regulator, Autorité des marchés financiers(AMF) , reminded providers in early 2026 that the French transition period ends on July 1, 2026. After this date, only EU-licensed CASPs may offer crypto services in France. Firms that do not comply must wind down their services and may face penalties for operating illegally. ESMA has issued similar guidance across the EU, urging crypto operators to prepare for the transition and verify their licensing status in MiCA registers.

Additional guidance is being issued in 2026 to refine MiCA’s application. In January 2026,ESMA published guidelines on the knowledge and competence standards required for crypto-asset portfolio managers, effective from July 28, 2026. The EBA, which will supervise large stablecoin issuers from 2026, advised national banks in February 2026 on managing the end of the transition period for e-money token issuance under PSD2 rules. ESMA continues to release Q&A documents and technical standards, including sample white papers and JSON templates for trading records, to clarify MiCA-compliant data formats.

Looking ahead, MiCA will be fully enforced by mid-2026 with no further grace periods. All transitional arrangements expire by July 1, and regulators expect crypto companies to have completed MiCA implementation by then. Afterward, the EU will begin assessing the regulation’s impact. TheEBA’s 2026 work programme notes its new oversight role for MiCA and ongoing monitoring of risks such as systemic stablecoins. In future years, the European Commission and regulators may review MiCA’s effects and consider adjustments, but the immediate focus in 2026 is on compliance and a smooth transition to the unified framework.