MiCA

The Markets in Crypto-Assets Regulation, known as MiCA or MiCAR, is Regulation (EU) 2023/1114, the European Union's framework for crypto-assets that existing financial services law does not already cover. It sets rules for offers of crypto-assets to the public, for issuers of stablecoins (called asset-referenced tokens and e-money tokens), for crypto-asset service providers such as exchanges and custodians, and for market abuse. A provider authorised in one member state may serve clients across the EU. The stablecoin rules applied from 30 June 2024 and the remainder from 30 December 2024, and the last national grandfathering periods for service providers ended on 1 July 2026.¹² MiCA shaped the euro and dollar stablecoin market in Europe, led Coinbase Europe to delist Tether's USDT, and is the subject of an open dispute over whether the same stablecoin may be issued both inside and outside the EU.³⁴

BackgroundReport an error

Before MiCA, EU law covered crypto-assets only when they qualified as financial instruments, deposits, funds or similar categories. National regimes filled the gap unevenly. France, for example, had a regime created by its PACTE law in 2019 for token offerings and digital asset service providers.⁵ On 24 September 2020 the European Commission adopted a digital finance package that included a proposal for a regulation on markets in crypto-assets. The Commission described it as a bespoke regime for crypto-assets not covered by existing legislation, including "stablecoins", with authorisation requirements for issuers and service providers and tighter requirements for issuers of significant asset-backed tokens.⁶

Legislative historyReport an error

The Council presidency and the European Parliament reached a provisional agreement on 30 June 2022 at the end of trilogue negotiations. France's financial markets authority, the AMF, reported that the deal would apply 18 months after entry into force and that NFTs would generally be excluded, with the Commission to assess within 18 months whether a specific NFT regime was needed.⁵

Parliament approved MiCA on 20 April 2023, by 517 votes to 38 with 18 abstentions, in the same session as a separate law extending the "travel rule" for transfers of crypto-assets.⁷ The Council adopted the Regulation on 16 May 2023, and it was signed on 31 May 2023 and published in the Official Journal on 9 June 2023.¹ It entered into force on the twentieth day after publication.¹

Under Article 149, Titles III and IV, on asset-referenced tokens and e-money tokens, apply from 30 June 2024. The rest of the Regulation applies from 30 December 2024. Certain provisions that empower the Commission, the EBA and ESMA to adopt technical standards applied from 29 June 2023.¹

ProvisionsReport an error

Scope and exclusions

MiCA applies to people who issue or offer crypto-assets to the public, seek their admission to trading, or provide services relating to them in the Union.¹ It does not apply to crypto-assets that are financial instruments, deposits, funds (unless they are e-money tokens), securitisation positions, insurance and pension products and similar categories listed in Article 2(4).¹ ESMA published guidelines in December 2024 on when a crypto-asset qualifies as a financial instrument.⁸

Two exclusions matter for the market. First, Article 2(3) excludes crypto-assets that are unique and not fungible with other crypto-assets. The preamble says issuing tokens as NFTs in a large series or collection should be treated as an indicator of fungibility, and that attributing a unique identifier to a token is not by itself enough to make it non-fungible.¹ Second, the preamble says that where crypto-asset services are provided "in a fully decentralised manner without any intermediary", they fall outside the Regulation. The same recital says the Regulation covers activities that are partly performed in a decentralised manner, and that crypto-assets with no identifiable issuer fall outside Titles II to IV, although service providers dealing in them are covered.¹ Article 142 required the Commission to report by 30 December 2024 on decentralised finance, crypto lending and borrowing, and the treatment of unique and non-fungible crypto-assets, with a legislative proposal where appropriate.¹

Other crypto-assets

Crypto-assets that are neither asset-referenced tokens nor e-money tokens, such as most tokens traded on exchanges, fall under Title II. An offeror must be a legal person and must draw up, notify and publish a crypto-asset white paper. Competent authorities do not approve the white paper before publication.¹

Asset-referenced tokens

Article 3 defines an asset-referenced token as a crypto-asset that is not an e-money token and that purports to maintain a stable value by referencing another value or right or a combination of them, including one or more official currencies.¹

An issuer must be authorised by its home member state, or be a credit institution that follows a white-paper procedure. Issuers with an average outstanding value that never exceeds €5 million over 12 months, and offers limited to qualified investors, are exempt from authorisation but must still publish a white paper.¹ The authorisation is valid across the Union.¹

Issuers must hold own funds equal to the highest of €350,000, 2% of the average reserve of assets, and a quarter of the previous year's fixed overheads.¹ They must constitute and maintain a reserve of assets that is legally and operationally segregated from the issuer's estate and managed to cover the risks of the referenced assets and the liquidity risk of redemption. Reserve assets must not be encumbered, must be held in custody under conditions the Regulation sets, and may be invested only in highly liquid financial instruments with minimal market, credit and concentration risk.¹ Holders have a right of redemption against the issuer at all times, either in funds equal to the market value of the referenced assets or by delivery of those assets.¹ Issuers and service providers may not grant interest, and any remuneration or benefit tied to the length of time a holder keeps the token counts as interest.¹

If an asset-referenced token is widely used as a means of exchange within a single currency area, above 1 million transactions and €200 million a day, the issuer must stop issuing it and submit a plan to bring use below those levels.¹

E-money tokens

An e-money token is a crypto-asset that purports to maintain a stable value by referencing the value of one official currency. E-money tokens are deemed to be electronic money.¹ Only a credit institution or an electronic money institution may offer one to the public, and only after notifying a white paper to its competent authority, at least 40 working days before the intended offer.¹

Issuers must issue the token at par on receipt of funds. On request, they must redeem it at any time at par in funds (not in electronic money), and holders have a claim on the issuer. Redemption is not subject to a fee, without prejudice to Article 46.¹ Issuers and service providers may not grant interest, defined as for asset-referenced tokens.¹ At least 30% of the funds received must be held in separate accounts at credit institutions, and the rest invested in secure, low-risk assets denominated in the referenced currency.¹

Significant tokens and the EBA

A token is classified as significant by the EBA when at least three of the criteria in Article 43 are met. The listed criteria include more than 10 million holders, a value, market capitalisation or reserve above €5 billion, more than 2.5 million transactions and €500 million in transactions a day, and the interconnectedness of the token or its issuer with the financial system. The same criteria apply to e-money tokens.¹

Issuers of significant asset-referenced tokens come under EBA supervision, as do issuers of significant e-money tokens that are electronic money institutions with respect to the specific additional obligations in Articles 55 and 58. The EBA chairs a consultative supervisory college for each such issuer. Significant issuers face extra obligations, including liquidity stress testing and liquidity requirements for which the EBA is to develop technical standards, including a minimum amount of deposits in each referenced currency that cannot be lower than 60% of the amount referenced.¹

Crypto-asset service providers

Article 59 bars the provision of crypto-asset services in the Union unless the provider is a legal person authorised under Article 63 or is a financial entity such as a credit institution, investment firm or electronic money institution that is allowed to provide such services under Article 60. Authorised providers need a registered office in a member state where they carry out part of their services, effective management in the Union, and at least one director resident in the Union.¹

A provider that wants to serve clients in other member states notifies its home authority, which informs the host states, ESMA and the EBA within 10 working days. The provider may start in another member state on receipt of that communication, or at the latest 15 calendar days after submitting the information.¹ This is the passport.

A provider is significant if it has at least 15 million active users in the Union on average over a calendar year. The home authority then reports annually to ESMA's Board of Supervisors.¹

Transitional period

Article 143 allowed providers that operated lawfully under national law before 30 December 2024 to continue until 1 July 2026 or until they were granted or refused authorisation, whichever came first. Member states could opt out of the regime or shorten it where their previous national rules were less strict, and could apply a simplified procedure to applications from entities already authorised under national law that were submitted between 30 December 2024 and 1 July 2026.¹ Issuers of asset-referenced tokens that were not credit institutions and were already issuing before 30 June 2024 could continue only if they applied for authorisation before 30 July 2024.¹

Market abuse

Title VI applies to acts concerning crypto-assets admitted to trading or for which admission has been requested, whether on or off a trading platform, and to acts in third countries.¹ It requires issuers, offerors and persons seeking admission to disclose inside information, prohibits insider dealing and unlawful disclosure, and prohibits market manipulation. People who professionally arrange or execute transactions in crypto-assets must have systems to prevent and detect market abuse and report suspicious orders.¹

ImplementationReport an error

ESMA said in December 2024 that it had delivered more than 30 technical standards and guidelines over 18 months, many with the EBA. Its last package that month covered technical standards on detecting market abuse, and guidelines on reverse solicitation, suitability, transfer services, the qualification of crypto-assets as financial instruments and ICT security. The reverse solicitation guidelines say the exemption is narrow and applies only where the client is the exclusive initiator of the service.⁸

On 17 April 2026 ESMA published a statement on the end of the transitional period. It said that after 1 July 2026 any entity providing crypto-asset services to EU clients without a MiCA licence would be in breach of EU law and must stop. It expected unauthorised providers to have implemented wind-down plans by that date, authorised providers to onboard existing clients, and national authorities to act against unauthorised provision. It also said that non-EU entities may not, outside the narrow reverse solicitation exception, serve or solicit EU clients, including on a business-to-business basis through outsourced custody. It told investors to check ESMA's interim MiCA register.² A Luxembourg law firm reported that ESMA repeated the orderly wind-down expectation in a further statement on 23 June 2026.⁹

ESMA published a peer review in July 2025 of the Malta Financial Services Authority's authorisation of one crypto-asset service provider, which it did not name. It found significant issues that were still unresolved when the authorisation was granted and some risk areas that were not adequately assessed. It asked all national authorities that authorise providers to pay attention to business growth, conflicts of interest, governance, ICT architecture and decentralised products.¹⁰

Review and centralised supervision

On 20 May 2026 the Commission opened a consultation on reviewing MiCA, with comments due by 31 August 2026. Topics include the boundary with MiFID II, multi-issuance, euro stablecoins, the interest ban, lending and borrowing, staking and decentralised finance.⁴ The EBA replied on 24 September 2026, saying that MiCA's requirements for issuers are broadly appropriate but that third-country multi-issuer schemes pose "significant to very significant risks", and recommending that the Commission consider regulating crypto lending and review reserve and reporting requirements.¹¹ As of October 2026 this article has not confirmed any legislative proposal from the Commission following the review.

Separately, on 4 December 2025 the Commission published a market integration and supervision package. ESMA welcomed its proposal to transfer direct supervision of certain significant cross-border infrastructures and crypto-asset service providers to the EU level.¹² Ledger Insights reported that the Commission proposed direct ESMA supervision of all MiCA-regulated service providers.¹³ On 9 October 2026 the Council agreed the main elements of its negotiating position. Ledger Insights reported that it limits ESMA supervision to significant providers, keeps the 15 million user threshold and adds alternative criteria, so that a provider with just over 1 million users could qualify if it meets other tests such as assets in custody or trading volume. Commissioner Maria Luís Albuquerque said the Commission "deeply regrets the proposed compromise".¹³ Finance Magnates reported that firms under direct supervision would move to ESMA over two years.¹⁴ Parliament has yet to set its position, and negotiations with the Council can begin only once it does.¹³

EffectsReport an error

Tether and USDT

On 13 December 2024 Coinbase Europe and Coinbase Germany delisted six stablecoins for retail users, including USDT, citing MiCA. Coinbase said USDC and EURC remained supported because they were MiCA-compliant.³ Tether's chief executive Paolo Ardoino said in August 2024 that MiCA creates "an incredibly big systemic risk", and on 2 July 2026 Crypto Briefing reported that he confirmed Tether had deliberately not sought a MiCA licence for USDT, calling the reserve rules "dangerous" and "ill-conceived".¹⁵¹⁶

Tether announced on 27 November 2024 that it would end support for EURT, its euro-pegged token, and told holders to redeem by 27 November 2025. It cited changes in EU stablecoin regulation and falling interest, and said it would focus on MiCA-compliant euro and dollar tokens from Quantoz Payments.¹⁷

Circle

On 1 July 2024 Circle announced that its French entity, Circle Internet Financial Europe SAS, held an electronic money institution licence from France's prudential supervisor, the ACPR, and that it would issue USDC and EURC in the EU under MiCA's e-money token rules. Circle called itself the first global stablecoin issuer to comply, said USDC was the only top-10 stablecoin that was compliant at the time, and said its position was subject to possible Commission clarifications of the law.¹⁸¹⁹

Euro stablecoins and Qivalis

Qivalis is an Amsterdam-based company backed by 37 European banks that plans to issue a euro stablecoin. On 14 October 2026 it announced that the Dutch central bank, De Nederlandsche Bank, had authorised it as an electronic money institution. Issuance remained subject to MiCA's requirements and publication of a white paper, and Qivalis said it planned to begin within months.²⁰

The multi-issuance dispute

In a multi-issuance scheme, an EU entity and a non-EU entity issue fungible versions of the same token. Reuters described USDC as the largest EU-regulated multi-issuance stablecoin.²¹

On 3 September 2025 ECB President Christine Lagarde said "gaps remain" in MiCA. She argued that joint issuance by EU and non-EU entities lets the non-EU part avoid MiCA's requirements and that in a run on the token, EU-held reserves "may not be sufficient" for concentrated redemption demand. She called for legislation barring such schemes unless other jurisdictions have equivalent regimes and safeguards exist for transfers of assets.²² On 20 October 2025 the European Systemic Risk Board, which Lagarde chairs, published a recommendation that the Commission treat third-country multi-issuer schemes as not permitted under MiCA, to be clarified by the end of 2025. Failing that, it asked authorities to put safeguards in place, most by the end of 2026.²³

The Commission has taken a different view. Reuters reported in November 2025 that it saw no need for major changes. The EBA said it was waiting for the Commission to clarify whether multi-issuance is allowed, that the ESRB's concerns "reflect the inherent risks" of large redemptions, and that existing safeguards should be applied.²¹ In its May 2026 consultation, the Commission acknowledged that multi-issuance is currently not prohibited by MiCA for all stablecoins, and asked whether this should continue, listing options such as limiting direct redemption to clients of EU-authorised service providers.⁴ Parliament adopted a non-binding own-initiative report on digital assets in July 2026, by 390 votes to 86, that Ledger Insights said backs multi-issuance with safeguards.²⁴ The EBA's September 2026 response then called for changes to address the risks of third-country multi-issuer schemes.¹¹

CriticismReport an error

Uneven national supervision

On 15 September 2025 the French AMF, Austria's FMA and Italy's Consob published joint proposals. They said the first months of MiCA had shown "major differences in how crypto-markets are being supervised by national authorities" despite ESMA's coordination. They proposed direct ESMA supervision of major service providers to end opportunistic choice of the authorising country, stricter rules for non-EU platforms that target European investors, an independent cybersecurity audit before authorisation, and scrutiny of white paper filings.²⁵ ESMA's Malta review, two months earlier, raised related concerns about authorisation (see Implementation).¹⁰ The Council's October 2026 position narrowed the Commission's proposal to centralise supervision, and Ledger Insights reported the Commission's regret.¹³

ECB and the Commission

The ECB has pressed for tighter rules on foreign stablecoins (see above). Politico reported in April 2025 that the Commission and ECB clashed over stablecoin risk, and Ledger Insights said Peter Kerstens of the Commission saw no need for a "MiCA v2".²⁶

Industry

Tether's chief executive objects to the reserve rules, under which at least 30% of the funds behind an e-money token, and a minimum of 60% for significant tokens, are held as bank deposits.¹ Ardoino argued the Regulation creates systemic risk rather than reducing it. In 2026 he gave concentration risk in European banks as his reason for not seeking a licence.¹⁵¹⁶ Circle's July 2024 release described its compliance as subject to clarification by the Commission.¹⁸

TimelineReport an error

See alsoReport an error

• Stablecoin, the general article and list of stablecoins
• GENIUS Act, the United States stablecoin law
• UK cryptoasset regime
• Stablecoins Ordinance (Hong Kong)
• Payment Services Act (Japan)
• Tether, issuer of USDT
• USDC, issued by Circle

ReferencesReport an error