What is MiCA, and how does it affect the cryptocurrency market?

With the development of digital assets, the emergence of stablecoins, and increasing trading volumes, the legal aspects of cryptocurrency companies are becoming increasingly important.

In Europe, the answer to this challenge was the adoption of MiCA, which came into force in 2024. This document was the first comprehensive attempt to create unified rules for cryptoassets in the European Union.

What is MiCA?

MiCA (Markets in Crypto-Assets Regulation) is an EU regulation regulating the issuance, trading, and provision of services related to crypto-assets within the European Union. Its main purpose is to create a legal framework for the functioning of the digital asset market, prevent fraud, and protect investors.

MiCA was part of the broader Digital Finance Strategy initiative presented by the European Commission in 2020. The main objective of the regulation is to eliminate legal uncertainty caused by the lack of uniform rules for the cryptocurrency sector.

MiCA key provisions:

Regulation of crypto asset issuance and trading;
Requirements for cryptocurrency service providers (CASPs);
Introduction of strict rules for issuers of stablecoins;
Increased transparency, consumer protection, and anti-money laundering (AML) requirements;
Oversight of cryptoasset companies.

Which cryptoassets fall under MiCA?

MiCA divides crypto assets into several categories, each of which is regulated on its own merits:

Utility tokens provide access to a product or service within an ecosystem.
Asset-referenced tokens (ARTs) are tokens tied to the value of several fiat currencies, assets, or a basket of assets (analogous to Libra/Diem from Meta).
E-money tokens (EMTs) — stablecoins pegged to a single fiat currency (e.g., USDC, USDT).
Other crypto assets do not fall under the traditional categories of financial instruments.

Tokens falling under MiCA must meet strict requirements depending on their category. Issuers must provide a White Paper disclosing all key information to investors and regulators.

MiCA's impact on the cryptocurrency market

Regulation of stablecoins

One of the key objectives of MiCA is to control the issuance and use of stablecoins. The regulation imposes strict requirements on issuers, including:

Mandatory licensing of issuers in the EU;
Asset reservation requirements to ensure token stability;
Prohibition on accruing interest on stablecoins.

These regulations significantly limit the ability of companies such as Tether, the issuer of the Tether (USDT) stablecoin, and also create the conditions for European stablecoins such as Stasis Euro (EURS) to emerge that will be able to comply with MiCA requirements.

Requirements for cryptocurrency exchanges and services

MiCA introduces legal regulations for cryptocurrency service providers (CASPs — Crypto-Asset Service Providers), including exchanges, custodial services, and digital asset exchange platforms. Key requirements include:

EU registration and licensing;
Compliance with AML (anti-money laundering) regulations;
Increased user protection, including mandatory asset insurance.

These measures make it more challenging for crypto exchanges to operate in the EU and increase their legitimacy and trust from traditional investors.

Fighting fraud and manipulation

MiCA introduces strict measures against insider trading, market manipulation, and other unfair practices. This helps to make the crypto market more transparent and safer for investors.

Increasing the attractiveness of the cryptocurrency market

While the new requirements create barriers to business, they also make the cryptocurrency market more predictable and legitimate. Institutional investors, such as banks and funds, are more likely to invest in digital assets if regulated at the EU level.

Which companies will benefit and lose from MiCA?

Large regulated crypto exchanges such as Binance, Kraken, and Coinbase that are willing to adapt to the new regulations and comply with MiCA will be among the winners.

Financial institutions will also gain new opportunities to work with crypto assets as the emergence of clear rules increases their confidence in the sector. For example, Deutsche Bank is actively exploring opportunities to store and manage digital assets, and Societe Generale has launched a subsidiary, Forge, to work with tokenized assets.

In addition, MiCA-compliant European stablecoins will benefit, able to replace their unregulated counterparts in the market. Examples include EUROe from Membrane Finance and Monerium EUR (EURe).

However, not all companies will be in an advantageous position. Some DeFi projects may face difficulties if regulation extends to their sector, limiting anonymity and automated management.

Companies that are not ready for EU licensing, especially providers of unregulated stablecoins, will also be at a disadvantage as they cannot legally provide their services in the European market. For example, Tether, the issuer of USDT, and TrueUSD (TUSD), which is already facing difficulties in complying with MiCA regulations

Smaller, unregulated exchanges that may lose access to the EU market due to non-compliance with the new requirements will also be in a difficult situation.

Examples include Bisq, a p2p cryptocurrency exchange platform without centralized management, and BitMart, a small, centralized exchange not fully compliant with the new EU regulations.

Conclusion

MiCA has become a key driver for transforming the cryptocurrency market in Europe in 2025.

In the long term, MiCA could become a template for other jurisdictions, including the US and Asia, leading to a global tightening of cryptocurrency regulation. Despite possible restrictions for individual market participants, MiCA makes the European crypto industry more transparent and stable, creating a foundation for the sustainable growth of digital assets.