MiCA regulation consolidates European crypto market

The implementation of the Markets in Crypto-Assets (MiCA) regulation in the European Economic Area has led to significant consolidation within the digital asset sector. According to data from the European Securities and Markets Authority (ESMA) and a report by TRM Labs, only about 20% of pre-MiCA crypto-asset service providers (CASPs) have secured authorization to operate under the new rules.

This regulatory shift has created a strategic advantage for firms like Circle and Société Générale-Forge, the primary issuers of USDC and EURC, which have secured both electronic money token (EMT) and CASP authorizations. Many other issuers face limitations, particularly regarding the ability to provide custody of their own tokens for clients, which restricts their ability to offer B2B services and automated payouts.

Geographic differences in authorization rates are notable. Jurisdictions that established licensing capacity early, such as Germany, France, and the Netherlands, hold a higher concentration of authorized firms. In contrast, regions with looser previous registration requirements saw lower authorization rates; for example, none of the over 1,800 registered crypto organizations in Poland received MiCA authorization, and only eight out of more than 400 in Lithuania were authorized.

While the regulation has limited commercial operations for many issuers, TRM Labs notes that the framework has successfully isolated high-risk companies, reducing European exposure to sanctioned entities.