What is MiCA compliance and why it matters for crypto investors

Fully implemented in December 2024, MiCA (Markets in Crypto-Assets) represents the EU’s first framework for crypto regulations. With common rules and standards across member states, it replaces the previous system of inconsistent national guidelines. 

What is MiCA certification compliance about?  

Crypto licensing provided under the MiCA rules clarifies compliance rules for crypto-asset service providers in 30 countries across the European Union and European Economic Area, including Belgium, Germany, Spain, the Czech Republic, Italy, France, Norway, Austria, Finland, and others. This means companies like exchanges, trading platforms, wallet providers, and custodians located in the EU and certified by MiCA gain official legal status and are obligated to comply with strict rules for managing risks, protecting customers, and reporting activities.

Obtaining MiCA certification compliance ensures that service providers meet standardized regulatory requirements. The regulation was first proposed in September 2020 by Stefan Berger, a Member of the European Parliament from Germany, as rapporteur. MiCA aims to ensure a competitive and transparent environment for digital assets. In 2023, the European Parliament formally adopted MiCA, the final regulation was signed into law on May 31, 2023.

Based on recent updates from the European Securities and Markets Authority’s (ESMA) interim register, MiCA-authorised crypto companies currently include Circle, Paxos, Ambr Payments, MoonPay, Bitstamp, Crypto.com, Kraken, Coinbase, and others.

Crypto-assets covered by MiCA

MiCA regulation applies to a wide range of digital assets. The framework defines a crypto asset as a digital representation of value or rights that can be transferred and stored electronically, using DLT or similar technology.

Based on their design and function, MiCA classifies them into the following groups:

• Asset-referenced tokens (ARTs): These are a type of crypto-asset designed to maintain a stable value by referencing multiple assets. ARTs can be backed by one or more fiat currencies, commodities, cryptocurrencies, or a combination of these assets. To ensure stability, ART issuers must hold a diversified pool of reserve assets and comply with MiCA’s strict requirements on asset quality and liquidity. Tokenized assets that track the price of commodities, like gold, are examples of ARTs. 

• Electronic money tokens (EMTs): Classified as a form of electronic money, EMTs are designed to maintain a stable value by being pegged to a single official currency (e.g., the euro, U.S. dollar, or British pound). Because they are pegged 1:1 to a single currency, EMTs are easily redeemable. EURC by Circle and EURA by AllUnity fall into this category. MiCA notes that asset-referenced tokens and e-money tokens are often described as “stablecoins.” However, they differ in aspects such as pegging, legal status, and compliance requirements.​​

• Other crypto-assets not falling into the existing EU law: Any crypto asset that can be traded or used for payments within the EU, mainly utility tokens designed to provide digital access to a good or service via DLT. Currently, MiCA focuses primarily on stablecoins, requiring ART and EMT issuers to maintain backed reserves with liquid assets, undergo regular audits, provide transparency reports, and be based in the EU.

It’s important to note that MiCA is mainly designed to regulate centralized crypto companies. The framework is not static, and public consultations continue. 

How MiCA regulation impacts crypto 

Earlier in our article, we broke down the question of “what is MiCA regulation” and how it provides regulatory clarity for crypto. After years of uncertainty, crypto companies can gain licenses and operate confidently across Europe. For crypto holders, MiCA means stronger legal protection.

However, the framework has also raised concerns, imposing limitations. For example, compliant stablecoins need to be backed by MiCA-regulated assets, which has led to dollar-pegged stablecoins being delisted from European crypto exchanges. In April 2025, assets like USDT, DAI, and TrueUSD became unavailable for spot trading in Europe. According to Cardano Foundation CEO Frederik Gregaard, these delistings can leave Europe at a competitive disadvantage, pushing innovation to other jurisdictions. Gregaard noted that major stablecoins are essential for traders, while euro-backed stablecoins represent only a tiny fraction of the market.

There are also risks related to DeFi, raising concerns about user privacy. Sky (formerly MakerDAO) co-founder Rune Christensen previously argued that requiring licenses for all DeFi applications within European jurisdictions could block user-friendly decentralized frontends because of KYC standards. DeFi’s future remains largely uncertain in Europe as MiCA leaves decentralization out of its scope. Policy developments in this area continue.

While MiCA is the most comprehensive framework for crypto regulation, it is not the only one. The Digital Operational Resilience Act (DORA), for example, focuses on cybersecurity and operational resilience for financial entities, including crypto firms. It requires robust IT risk management, incident reporting, and business continuity planning. The EU is also working on standardizing crypto taxation rules, including reporting obligations for crypto gains and cross-border transactions. Countries such as France, Germany, and the Netherlands already have national crypto tax rules. Other regulatory efforts include the Anti-Money Laundering Directives (AMLDs) and the “Travel Rule” for crypto, which mandates that crypto-asset service providers collect and transmit identifying information about both the sender and the recipient for crypto transactions.

List of Sources  

1. Markets in crypto-assets (MiCA) briefing, September 2023. Source: European Parliament 

2. List of competent authorities designed under MiCA. Source: the European Securities and Markets Authority 

3. MiCA status update on the list of authorized stablecoin issuers and crypto-asset service providers. Source: Patrick Hansen on X/ESMA interim register 

4. Binance announcement about delisting non-MiCA-compliant stablecoins – including USDT, DAI, and First Digital USD (FDUSD) – in the European Economic Area (EEA) from March 31, 2025. Source: Binance.com

5. Cardano Foundation CEO Frederik Gregaard about MiCa’s advantages and risks. Source: x.com 

6. Sky co-founder Rune Christensen on the potential implications of European regulations on DeFi. Source: x.com

7. A Proposed Rule by the FinCEN to modify the Travel Rule threshold in 2020: www.federalreserve.gov 

8. EU’s Digital Operational Resilience Act (DORA). Source: European Insurance and Occupational Pensions Authority (EIOPA)