In plain words
Before MiCA, a crypto firm in Europe was like a restaurant that needed a different hygiene certificate in every town it opened in, and some towns had no rules at all. MiCA replaced that with one EU-wide rulebook and one licence that works everywhere in the EU.
MiCA, the Markets in Crypto-Assets Regulation, is Regulation (EU) 2023/1114. 1 It covers two groups. The first is issuers: companies that create crypto tokens and offer them to the public, with the strictest rules for stablecoins. The second is crypto-asset service providers, or CASPs: firms that hold, exchange, transfer or advise on crypto for customers.
For a founder, MiCA answers two practical questions. Can I issue a stablecoin in the EU, and who can? And what licence do I need to let EU customers buy, sell, hold or send crypto in my app?
How it works
How MiCA sorts crypto activity
First, what kind of token is it. Then, what are you doing with it.
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1
Is it covered at all?
Tokens that are already financial instruments, such as tokenised shares, fall under securities law instead. Central bank digital currencies and fully decentralised services are outside MiCA.
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2
What kind of token?
An e-money token (EMT) tracks one currency. An asset-referenced token (ART) tracks a basket or other assets. Everything else is an “other crypto-asset”.
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3
Issuer rules
Issuers publish a white paper and, for stablecoins, must be authorised, hold reserves and honour redemption.
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4
Service provider rules
Anyone serving EU customers with crypto services needs CASP authorisation: capital, governance, safekeeping of client assets, conduct rules and complaints handling.
Stablecoin rules: EMTs and ARTs
MiCA treats stablecoins most strictly, because people use them like money. Their rules applied first, from 30 June 2024. 1
| E-money token (EMT) | Asset-referenced token (ART) | |
|---|---|---|
| What it tracks | One official currency, such as the euro or the dollar | A basket of currencies, commodities or other assets |
| Who can issue it | Only credit institutions and EMIs | A firm authorised for ARTs by its national regulator, or a credit institution |
| Redemption | At par, at any time, free of charge | Holders can redeem at any time |
| Interest | Not allowed | Not allowed |
| Reserves | Funds safeguarded, with a set share held as bank deposits | A reserve of assets, kept separate and protected |
| If it gets very large | “Significant” tokens get extra rules and EBA supervision | The same |
In practice, this means a fintech that wants to issue its own euro stablecoin must either be an EMI or bank, or partner with one.
What a CASP licence covers
CASP rules applied from 30 December 2024. A firm needs authorisation for each service it provides, and minimum capital rises with the riskiest service it offers. 2
€50,000
Advice and order services
Receiving and passing on orders, executing them, placing tokens, transfer services, advice and portfolio management.
€125,000
Custody and exchange
Holding crypto for clients, and exchanging crypto for money or for other crypto, which covers most on-ramps and off-ramps.
€150,000
Trading platform
Operating a platform where many buyers and sellers trade crypto.
CASPs must also follow the EU travel rule, which since 30 December 2024 requires sender and recipient information to travel with crypto transfers. 3
Transition periods
Crypto firms already operating under national rules before 30 December 2024 could keep serving customers while they applied for MiCA authorisation. The longest allowed period ran to 1 July 2026, and each member state chose its own, often shorter, deadline. Those periods have now ended, so firms serving EU customers need MiCA authorisation.
Market abuse and marketing
MiCA also bans insider dealing and market manipulation in crypto traded on platforms, and requires marketing to be fair, clear, not misleading and consistent with the token’s white paper. A firm outside the EU cannot get round the licence simply by claiming its EU customers came to it on their own initiative: that exemption is read narrowly.
MiCA, the UK and the Gulf
| Market | Crypto rules | What it means for you |
|---|---|---|
| European Union | MiCA, plus the travel rule | One CASP licence, passported across the EU |
| United Kingdom | No MiCA. Crypto firms register with the FCA for anti-money-laundering purposes and follow financial promotion rules. A full authorisation regime is due to start on 25 October 2027 4 | A UK firm serving EU customers needs an EU entity with MiCA authorisation |
| UAE | Several regimes: VARA in Dubai outside the DIFC, Central Bank rules on payment tokens, and separate rules in the DIFC and ADGM | Choose the route by where you operate and what you do |
For the UAE picture, read UAE stablecoins: what most founders get wrong first.
Example: adding crypto to an EU wallet
Ana runs a euro wallet app operating on an EMI licence in Ireland. She wants customers to buy, hold and sell bitcoin and a euro stablecoin.
- Licence check. Exchanging euros for crypto and holding it for customers are CASP services. Her EMI licence does not cover them.
- Route. She can apply for CASP authorisation herself, or partner with an authorised CASP that provides the crypto service inside her app.
- The stablecoin. She offers an existing euro EMT from a MiCA-compliant issuer rather than issuing her own.
- Controls. The crypto flow adds travel rule data, wallet screening and new disclosures, and customers see clearly which firm provides which service.
Common misconceptions
“An EMI licence lets us offer crypto.”
An EMI can issue e-money tokens, but exchanging or holding crypto for customers needs CASP authorisation, or a CASP partner.
“MiCA applies everywhere in Europe, including the UK.”
MiCA is EU law. The UK is building its own separate crypto regime.
“Any company can launch a euro stablecoin under MiCA.”
Only credit institutions and EMIs can issue e-money tokens, with reserves, redemption at par and a published white paper.
FAQ
What is MiCA regulation?
MiCA, Regulation (EU) 2023/1114, is the EU law that regulates crypto-assets that are not already covered by financial services law. It sets rules for issuers of stablecoins and other tokens, and for the firms that exchange, hold, transfer or advise on crypto for customers.
When did MiCA come into effect?
The rules for stablecoins, called e-money tokens and asset-referenced tokens, applied from 30 June 2024. The rest of MiCA, including the rules for crypto-asset service providers, applied from 30 December 2024.
What is a CASP under MiCA?
A crypto-asset service provider, or CASP, is a firm authorised under MiCA to provide crypto services such as custody, running a trading platform, exchanging crypto for money or other crypto, or transferring crypto for customers. A CASP licence from one EU country can be passported across the EU.
Who can issue a euro stablecoin under MiCA?
A stablecoin pegged to a single official currency, such as the euro, is an e-money token. Only credit institutions and electronic money institutions can issue e-money tokens to the public in the EU, and they must publish a white paper first.
Is there a MiCA transition period?
Yes. Crypto firms already operating under national law before 30 December 2024 could continue for a limited time while applying for MiCA authorisation, up to 1 July 2026 at the latest. Each member state could choose a shorter period, so the end date varied by country.
Does MiCA apply to UK crypto firms?
MiCA applies to firms serving customers in the EU. A UK firm that wants to offer crypto services to EU customers generally needs MiCA authorisation through an EU entity. The UK has its own separate crypto regime.
Sources
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1
EL
EUR-Lex Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA)
https://eur-lex.europa.eu/eli/reg/2023/1114/oj -
2
E
ESMA Markets in Crypto-Assets Regulation (MiCA)
https://www.esma.europa.eu/esmas-activities/digital-finance-and-innovation/markets-crypto-assets-regulation-mica -
3
EL
EUR-Lex Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets
https://eur-lex.europa.eu/eli/reg/2023/1113/oj -
4
FC
Financial Conduct Authority Cryptoassets: our work
https://www.fca.org.uk/firms/cryptoassets
