MiCA Review Weighs Crypto Compliance Costs Against Access

The European Commission is reviewing the Markets in Crypto-Assets Regulation (MiCA) to assess whether its compliance requirements remain proportionate to the risks in crypto markets. The consultation is scheduled to close Sept. 30.

MiCA established a common regulatory framework for crypto-asset service providers (CASPs) across the European Union and European Economic Area, replacing different national requirements. A CASP authorized in one EU member state can apply to offer services across the bloc through the passporting system.

The system gives licensed providers access to a market of about 450 million people. It also allows customers to choose among firms supervised under common rules.

The review is expected to examine requirements linked to client funds, custody, market integrity and financial stability. The consultation text proposes keeping rules that reduce clear risks while simplifying or removing obligations that add costs without a measurable risk-reduction benefit.

Compliance costs have risen for CASPs since MiCA took effect. Authorization processes and compliance systems include fixed expenses, which can affect smaller firms and new entrants more heavily than larger companies. Higher costs could reduce competition or lead some digital-asset businesses to direct new investment to jurisdictions with lower regulatory costs.

One proposal is to introduce different requirements based on a firm’s size, client base, assets or potential effect on the financial system. Under that approach, a small startup would face a different compliance burden from a multinational company managing billions of dollars, while larger or systemically relevant providers would remain subject to stricter supervision.

The review could also address overlapping licensing requirements for electronic money tokens. Their custody and transfer can fall under MiCA and the EU’s Payment Services Directive, creating additional compliance costs and legal uncertainty. The consultation text proposes clearer boundaries between the two frameworks or a single licensing route.

Another issue is the reserve structure for stablecoin issuers. MiCA requires issuers to hold at least 30% of reserves as bank deposits. The text proposes allowing a wider range of high-quality liquid assets, while preserving issuers’ ability to meet redemption requests.

MiCA increased the requirements for operating legally in the EU through authorization, reporting and other compliance obligations. In return, authorized firms can provide services across member states without obtaining a separate full authorization in each market. The review will assess whether that balance remains proportionate.