Europe’s MiCA Review: Protecting the Crypto Market Without Raising the Cost of Entry

MiCA replaced a patchwork of national rules with one framework. A crypto asset service provider (CASP) licensed in one member state can now passport its services across the EU and EEA, reaching about 450 million people. With the European Commission’s review consultation closing on September 30, the question is whether the obligations still match the access they unlock.

MiCA Compliance Costs for Crypto Firms

Strict rules belong where client money, custody, market integrity and financial stability are at stake. Requirements that don’t clearly reduce risk should be simplified or removed.

Barriers for Small CASPs

Compliance costs have risen sharply, and smaller firms feel it most. If fixed costs climb too high, they favor incumbents, reduce choice and may push investment to other jurisdictions.

Proposed MiCA Reforms

A small startup shouldn’t carry the same burden as a multinational managing billions. Tiers based on assets, clients or systemic relevance would keep oversight strong where it matters.

Custody and transfer of e money tokens can trigger PSD2 on top of MiCA. A single license route would cut duplicate costs.

The 30% bank-deposit minimum limits yield and concentrates counterparty risk. Allowing other high-quality liquid assets could improve resilience.