Concept
Until 2023, the crypto market in Europe existed in a legal fog. Exchanges obtained local licenses in some places, operated almost without supervision in others, and investors lost all protection when moving across borders—hence the patchwork map of crypto jurisdictions. Regulation (EU) 2023/1114, known as MiCA—Markets in Crypto-Assets—closed this gap: for the first time, crypto-assets and those who service them were described by a single law across all 27 EU countries. Through the EEA Joint Committee mechanism, the regime extends to EEA countries outside the Union—Liechtenstein transposed MiCA into national law as early as February 2025, with Norway and Iceland following.
MiCA covers the issuance of crypto-assets and the provision of services with them—custody, exchange, execution of orders, advice, portfolio management. Excluded from its scope are instruments already regulated as financial (securities under MiFID II), fully decentralized protocols, and NFTs in their pure, unique form.
Three Token Categories
The law divides tokens into three baskets. An asset-referenced token (ART) maintains value through a basket of assets, currencies, or commodities. An e-money token (EMT) is pegged to a single official currency and functions as electronic money—this definition covers most stablecoins pegged to the euro or dollar. Everything else—utility tokens and other crypto-assets—forms the third, general category with lighter requirements.
Issuers must publish a white paper: a standardized document describing the project, risks, and holder rights, with liability for misleading information. For ARTs and for significant tokens that have reached scale, additional requirements apply for capital, reserve composition, and prior regulatory approval.
Significant Tokens and Non-Euro Stablecoins
Within stablecoins, MiCA distinguishes "significant" ARTs and EMTs—those that have grown to systemic scale. A token is considered significant if it meets at least three criteria from the set: more than 10 million holders in the EU, daily transaction volume exceeding €500 million, market capitalization above €5 billion, close interconnection with the financial system. Supervision of such issuers is elevated to Union level: significant ARTs come under direct EBA control, significant EMTs under joint EBA and national regulator control.
A separate mechanism targets stablecoins in foreign currencies. If an EMT pegged to a non-euro currency (primarily the dollar) is used as a means of payment, its circulation is limited: no more than 1 million transactions or €200 million per day. The logic here is directly political—the ECB sought to prevent dollar stablecoins from displacing the euro in European settlements. For private holders, this means that the depth and availability of certain USD stablecoins in the EU hits a regulatory ceiling.
CASP and Single Passport
Crypto-Asset Service Provider (CASP) is a licensed status for exchanges, brokers, custodians, and platforms. Having obtained authorization from the national regulator of one EU country, a company can operate across the entire single market through the passporting mechanism without a separate license in each jurisdiction—the same logic has long applied to banks and investment firms. Supervision is shared between ESMA and EBA at Union level and national competent authorities (NCAs) locally; EBA handles significant stablecoins directly. Market entry is also possible under another's authorization—through the white-label CASP model, where a licensed partner provides the regulatory wrapper.
Stages and Transitional Period
MiCA was introduced in stages. Rules for stablecoins (Titles III and IV, i.e., ART and EMT) came into force on 30 June 2024, rules for services (Title V, CASP) on 30 December 2024. For companies already operating under national regimes, a transitional period (grandfathering) was provided; it expires on 1 July 2026, and individual countries had the right to set an earlier deadline.
Related Rules and MiCA Limits
MiCA does not work alone. From 30 December 2024, the travel rule applies to all CASPs in the EU—the updated Transfer of Funds Regulation (Regulation (EU) 2023/1113): when transferring crypto-assets, platforms must collect and transmit data about the sender and recipient, and for transactions with unhosted wallets—verify who owns them. This is the same identification logic as in banking compliance for private clients, transferred to blockchain.
The regime also has clear boundaries. Outside its perimeter remain financial instruments under MiFID II, fully decentralized protocols (DeFi) without an identifiable operator, and unique NFTs. These zones still exist outside the unified framework, and the European Commission must separately assess whether regulation needs to extend to DeFi and tokenized assets. Therefore, MiCA should be read as the first layer, on top of which rules will continue to be built.
What This Means for Private Capital
For capital owners, the practical effect of MiCA lies in infrastructure. A platform's licensing status should be checked in advance: an account with an authorized CASP means asset segregation, audited reserves, and clear supervision, whereas access for Europeans to an unlicensed service will close after July 2026. Tax transparency operates in parallel: CARF is implemented in the EU by the DAC8 directive, which applies from 1 January 2026, and the first automatic exchange of data on crypto accounts will take place by early 2027. Relying on the anonymity of a European platform has lost its meaning—details in the crypto taxes by country overview.
Platforms can be verified at the source: ESMA maintains a public register of authorized CASPs and issuers, as well as registered white papers. If a company is not there, it has no right to work with European clients after 1 July 2026. For storing large positions, it makes sense to look toward regulated custody—with a licensed provider, assets are segregated and audited.
This material is an expert overview and does not constitute individual legal or tax advice.