The First 100 Days of MiCA: Regulation that Protects but Also Restricts

The European Union often prides itself on wanting to be a global leader in the regulation of digital assets. The regulatory framework for crypto assets, Markets in Crypto-Assets (MiCA), was conceived as the first comprehensive legal instrument to bring the crypto market into a zone of legal certainty, consumer protection, and business transparency.

More than a hundred days have passed since the EU began regulating one of the fastest-growing yet most volatile markets, the cryptocurrency market. However, this period shows that the path from ambition to a functional market framework is long, complex, and frustratingly bureaucratic for some.

Nikola Škorić, CEO of Electrocoin, recently shared a concerning analysis on LinkedIn: of the 23 companies that have so far received a MiCA license, only four are ‘crypto-native’ from the EU, and that definition is very broad. The others are either subsidiaries of traditional financial institutions (e.g., Crypto Finance, owned by Deutsche Börse) or non-EU companies that provide access to the European market.

Škorić warns that instead of MiCA fostering domestic innovation, it could result in the dominance of external players while local companies remain in the minority.

Even more concerning is the fact that only seven member states have issued MiCA licenses so far, while 20 have not issued any. Given that it is estimated that there are around 3,400 crypto-related service providers in the EU that will need to be licensed in the next year, the question arises whether domestic crypto companies will remain in the minority. The initial period reveals much about Brussels’ regulatory ambitions and the market’s readiness to follow them.

Chronology and Basic Provisions of MiCA

MiCA was officially adopted in mid-2023, and from December 30, 2024, the part relating to stablecoins and token issuers will apply. From June 30, 2025, the rules for crypto service providers will come into full effect. In theory, MiCA allows companies with one EU license to operate throughout the Union, which is a legally elegant but technically demanding step towards the ‘passporting’ of crypto services.

In practice, it is already clear that only the largest institutional players, mainly banks and large international exchanges, are ready for the challenges that MiCA brings.

MiCA and Stablecoins: The Role the Legislator (Did Not) Want

One of the key goals of MiCA was to establish a clear framework for the issuance and use of stablecoins, with a particular emphasis on consumer protection and financial stability. The new regime prohibits the simultaneous use of a stablecoin as a ‘universal means of payment’ if its use exceeds a certain transaction threshold, and issuers must have clearly defined reserves, redemption mechanisms, and a license. This could mean that a popular global stablecoin like USDT cannot simply operate as before in the EU.

The regulation introduces strict rules for so-called ‘significant’ stablecoins, including daily limits of 200 million euros in turnover or one million transactions. Patrick Hansen, one of the leading experts on crypto regulation in Brussels, warns that such an approach ‘regulates to irrelevance,’ as no serious stablecoin can operate long-term under such restrictions.

A particular problem is the asymmetry: banks issuing similar instruments are not subject to these rules. This raises questions of regulatory bias. Is the banking sector consciously favored at the expense of innovators?

If European stablecoins are essentially unprofitable, then the euro as a digital currency loses the race in the global market right from the start. At a time when dollar-pegged stablecoins account for over 99 percent of the market, Europe risks losing monetary sovereignty in the digital space.

Imagined Inclusion, Real Concentration of Power

MiCA is often promoted as regulation that ‘levels the playing field’ in the market. However, comments from the European crypto community show that many in the industry believe the opposite is happening. According to them, MiCA in its structure has not accidentally favored banks; it was a strategic choice.

Innovators without large legal and compliance departments find it difficult to bear the regulatory burden that MiCA imposes. Consequently, the market is centralizing around capital-strong players, while the startup scene faces existential challenges.

‘MiCA was not written for innovators, but for those who are already regulated, and that is the banks,’ is one of the criticisms, warning that the EU is not actually implementing a technological but an industrial policy. In this light, MiCA acts more as a tool for preserving market stability and preparing for the introduction of a digital euro than as an incubator for digital innovation.

Geopolitical Dimension: American and Asian Dominance

While the EU tightens conditions for domestic issuers, American and Asian entities are expanding their influence unhindered. Several experts have commented that the EU missed the moment when it could have taken the lead in developing the global market for digital assets. The stablecoin market is growing exponentially, just not in Europe.

While in the US, under the Biden administration, crypto regulation has evolved through judicial precedents, the landscape changed when Donald Trump became president again:

1. The Guidance and Establishment of National Innovation for American Stablecoins (GENIUS Act) is progressing to the next phases
2. The SEC is actively discussing the idea of a regulatory sandbox with participants in the crypto industry
3. Trump signed an order prohibiting the establishment and promotion of a central bank digital currency (CBDC)
4. Trump established a bitcoin strategic national reserve

The United States clearly no longer approaches cryptocurrencies as just a market trend, but increasingly treats them as a matter of national strategy and monetary sovereignty.

MiCA, the End of the Beginning, Not the Beginning of the End

Although there is no shortage of criticism, MiCA still represents an important step towards a regulated and legally secure market. Success will not be measured only by the number of licenses issued but also by who will realistically be able to utilize those licenses. If only the large players benefit and smaller actors withdraw or move to other jurisdictions, the EU will have a legislative framework but will not have a market.

In the lead-up to full implementation in June 2025, the flexibility of regulators, willingness to engage in dialogue with the industry, and genuine political will to support European innovation, not just European regulation, will be crucial.