Quick Takeaways:
- MiCA was supposed to make crypto regulation in the EU simple, but it’s off to a shaky start.
- Countries like France and Italy are worried about firms picking easy routes through “passporting.”
- Startups are struggling to keep up, while bigger players cruise ahead.
MiCA’s Big Idea: One License to Rule Them All
When the EU first introduced MiCA (short for Markets in Crypto-Assets), it was meant to be a game-changer.
The idea was simple: instead of companies having to get licensed in every single EU country, they could get approval in just one and then do business across the entire bloc.
That’s called passporting, and on paper, it sounded like a win-win. Less red tape for crypto firms, and more oversight for regulators. But now, less than a year in, things aren’t going exactly to plan.
So What’s Going Wrong with MiCA?
Here’s the thing: not all EU countries are handling MiCA the same way. Some regulators, especially in places like France, Italy, and Austria, are worried that companies are picking the countries with the easiest rules just to get in the door.
Once they have their license, they can offer services across the EU, even in places with stricter standards.
This tactic is called regulatory arbitrage, and it’s not new. It’s been happening in other financial sectors for years.
As Jerome Castille from CoinShares puts it, “We’ve seen platforms chase looser rules before. MiCA was supposed to fix that. But it looks like we might be repeating old mistakes.”
So instead of creating a level playing field, MiCA could accidentally be helping firms find the easiest way through, not the right one.
Meanwhile, Small Crypto Startups Are Feeling the Pressure
While some big companies are gaming the system, smaller firms are just trying to survive.
For startups, MiCA isn’t just one more regulation; it’s a massive, complex shift they have to deal with fast.
Legal fees, paperwork, and internal compliance add up quickly. And unlike the big players, they don’t have the money or manpower to handle it all smoothly.
Marina Markezic, who leads the European Crypto Initiative, put it simply:
“It’s really intense. For bigger firms, MiCA is great. But for smaller companies, it’s honestly overwhelming. Some may not make it.”
And to make things worse, the way each country enforces MiCA is all over the place.
Some regulators are moving fast and know what they’re doing. Others? Not so much. That means crypto companies are getting mixed messages, and in some cases, waiting months for basic answers.
Can MiCA Still Work?
Honestly? Yes, but only if the EU acts quickly.
The whole point of MiCA is to create a single, consistent crypto rulebook across Europe. But that only works if every country is actually playing by the same rules.
Right now, they’re not. And that opens the door to confusion, loopholes, and unfair advantages.
If the European authorities can step in with clearer guidance and tighter coordination, there’s still a chance to fix this.
MiCA could still become the gold standard for crypto regulation, something that protects users and supports innovation.
But if they don’t? We could end up with the very system MiCA was supposed to replace, a confusing mess of uneven rules and risky shortcuts.
