Europe Reviews Crypto Rules as MiCA Enters New Phase

The European Union's Markets in Crypto-Assets Regulation, known as MiCA, has established a common regulatory framework for crypto assets across the bloc, creating licensing and conduct rules for issuers and crypto-asset service providers.

The European Union is reviewing its Markets in Crypto-Assets framework as regulators assess how the bloc’s crypto rules are working in practice.

MiCA's provisions did not all take effect at the same time. Rules covering asset-referenced tokens and e-money tokens began applying on June 30, 2024, while most of the regulation, including the broader framework for crypto-asset service providers, became applicable on Dec. 30, 2024.

Stablecoins, including asset-referenced tokens and e-money tokens, face specific requirements covering authorization, reserves and disclosures.

Crypto-asset service providers such as exchanges, custodians and brokers are subject to authorization, governance, capital and client-asset safeguards under the framework.

One of MiCA's major advantages for regulated businesses is its passporting system.

Once authorized in one EU member state, eligible crypto-asset service providers can offer services across the bloc without obtaining a separate full authorization in every country.

MiCA also establishes rules against insider dealing and market manipulation and requires providers to give customers information about the risks associated with crypto assets.

The framework does not, however, make crypto investments risk-free or guarantee that investors will be protected against losses.

The European Commission is now reviewing how MiCA has worked in practice and whether changes are necessary.

Its targeted consultation on the regulation opened in May and has a deadline of Sept. 30, 2026.

The Commission says the review will assess whether MiCA remains fit for purpose in light of its initial implementation and developments in crypto markets and policy. The review could eventually lead to legislative changes if the Commission determines that the framework needs to be amended or supplemented.