On 30 December 2024, the authorisation rules of the Markets in Crypto-Assets Regulation took effect across the EU, and the era of registering a crypto business in whichever member state asked the fewest questions began to close. MiCA, formally Regulation (EU) 2023/1114, is the first attempt anywhere to regulate an entire crypto sector with one rulebook, and any firm touching European clients now plans around it whether it likes the text or not.
What MiCA covers, and what it does not
MiCA regulates crypto-assets that are not already financial instruments, and the businesses providing services on them. Three asset classes sit inside: e-money tokens pegged to a single fiat currency, asset-referenced tokens backed by baskets or other assets, and the broad remainder of utility tokens and coins. The stablecoin rules arrived first, in June 2024, and are covered in our piece on EMTs and ARTs.
Just as important is what stays outside. Security-like tokens remain under MiFID. Truly decentralised protocols with no intermediary are out of scope, as are most NFTs. And a derivative on a crypto-asset, a bitcoin CFD for instance, is a MiFID financial instrument, so a broker offering it needs an investment firm licence rather than a MiCA one. That single distinction resolves half the confused licensing questions in this industry, and our comparison of forex and crypto licences walks through it.
The CASP licence
Businesses need authorisation as a crypto-asset service provider, a CASP, for a defined list of services: custody, operating a trading platform, exchanging crypto for fiat or other crypto, executing orders, placing, advice, portfolio management and transfer services. One authorisation from one national regulator covers the named services, and a notification procedure passports them across the whole EU. For a firm that previously maintained separate registrations in France, Germany and Poland, consolidation into one licence is the genuine gift inside the compliance burden.
Capital and prudential requirements
Base own funds depend on the service class: 50,000 euros for order-related services and advice, 125,000 euros for custody and exchange services, 150,000 euros for running a trading platform. On top sits an ongoing requirement: hold the higher of the base figure or one quarter of the previous year's fixed overheads. Governance expectations resemble investment firm rules: fit and proper management, local substance, safeguarding of client assets segregated from the firm's own, complaint handling and conflict policies that actually operate.
The deadlines that already passed, and the one ahead
Stablecoin rules applied from 30 June 2024. CASP authorisation applied from 30 December 2024, with member states allowed to grant existing registered firms a transitional window. Those windows were national choices, some states gave a year, some six months, some almost nothing, and the longest possible grandfathering runs out on 1 July 2026. A firm still operating on a legacy national registration in 2026 is living on borrowed time measured in months. The comparison with the old regimes is drawn out in MiCA vs national VASP registrations.
MiCA authorisation is a full application, never a stamp conversion. Regulators are reviewing business plans, custody arrangements and capital as if the firm were new, and several member states have publicly warned that incomplete transitional applications will simply lapse alongside the old registration.
What it means in practice
For serious firms, MiCA is a net gain: one licence, one passport, and a credibility standard that separates them from the unlicensed tail of the market. For small operations, the capital floor plus the cost of compliance staff prices some business models out, and a wave of consolidation among smaller European exchanges has been the predictable result. For trading businesses the boundary line bears repeating: if the product is spot crypto held for clients, think MiCA; if the product is a leveraged contract referencing crypto, think MiFID, with everything our guide to crypto licensing jurisdictions says about choosing where to base the operation.
"Half the MiCA questions I hear are really MiFID questions. If the product is a CFD on bitcoin, MiCA is not your regime. The instrument decides the rulebook, never the word crypto."
— Roman Onta, Executive Director, SINGUARD
Key Takeaways
- MiCA created one EU-wide CASP licence with passporting, replacing the old patchwork of national crypto registrations.
- Base capital runs 50,000 to 150,000 euros by service class, or a quarter of fixed overheads if that is higher.
- Stablecoin rules applied from June 2024, CASP rules from December 2024, and all national grandfathering ends by 1 July 2026.
- Crypto derivatives stay under MiFID: a bitcoin CFD needs an investment firm licence, never a CASP one.
Frequently Asked Questions
Who needs a MiCA licence?
Any business providing crypto-asset services to clients in the EU: exchanges, brokers, custodians, transfer services and advisers dealing in crypto-assets that are not already regulated as financial instruments. Firms that only build software and never touch client assets or orders generally fall outside the authorisation requirement.
How much capital does a CASP need under MiCA?
Base capital starts at 50,000 euros for advice and order services, 125,000 euros for custody and exchange operated as intermediary, and 150,000 euros for trading platforms. Firms must also hold prudential safeguards of at least a quarter of the previous year's fixed overheads if that figure is higher.
Does MiCA cover crypto CFDs?
No. A CFD on bitcoin is a derivative and remains a MiFID financial instrument, regulated under investment services law with the leverage caps and conduct rules that apply to CFDs. MiCA covers the crypto-assets themselves and services on them, such as exchange and custody.