In June 2023, the European Union enacted Regulation (EU) 2023/1114—better known as MiCA (Markets in Crypto-Assets). As the first comprehensive regulatory framework for crypto-assets in the EU, MiCA positions Europe as a global leader in digital asset oversight.
For founders, token projects, fintech companies, and institutional investors operating in or expanding into the EU, this law introduces a transformative shift. MiCA is not just another layer of red tape—it lays down the foundation for how crypto business will be conducted across 27 member states.
This article walks through the major components of MiCA, who it applies to, what’s excluded, and what crypto businesses need to know to move forward.
What Is MiCA?
MiCA is part of the European Union’s Digital Finance Package and provides a unified licensing framework for the regulation of crypto-assets. It replaces fragmented country-by-country rules with a single passportable license, meaning a crypto company authorized in one EU state can operate in all others.
The regulation applies to both issuers and service providers, covering a wide range of activities such as offering crypto-assets to the public, trading, custody, portfolio management, and investment advice. MiCA’s aim is to promote innovation in the sector while safeguarding consumers and ensuring financial stability.
🧠 For a closer look at how MiCA compares to emerging U.S. frameworks, check out our breakdown of the GENIUS Act and STABLE Act.
What Types of Crypto-Assets Are Covered?
MiCA defines three categories of digital assets:
- Asset-Referenced Tokens (ARTs): These are stablecoins backed by a basket of currencies, commodities, or other assets.
- E-Money Tokens (EMTs): These are tokens pegged to a single fiat currency, functioning similarly to traditional e-money.
- Other Crypto-Assets: This broad bucket includes utility tokens and most native project tokens.
Notably, non-fungible tokens (NFTs) are excluded from MiCA’s scope unless they are fractionalized or traded in a manner that renders them fungible. Security tokens also fall outside of MiCA, remaining under the governance of MiFID II.
Who Is Subject to MiCA?
MiCA applies to any legal entity engaged in crypto-asset activities in the EU. This includes:
- Issuers of ARTs and EMTs
- Crypto-asset service providers (CASPs)
- Trading platform operators
- Custodians and wallet providers
Additionally, promoters, influencers, and other parties marketing tokens or related products to EU users may also fall within the regulatory perimeter.
Even fully decentralized projects could face MiCA obligations if there is a clear party involved in issuing the asset or operating a trading interface. Location outside the EU does not guarantee exemption—if your project targets EU users, MiCA may apply.
Core Compliance Obligations
MiCA introduces licensing and operational requirements for both token issuers and CASPs. The obligations differ depending on the role of the entity:
For issuers of ARTs and EMTs:
- Must be incorporated in an EU member state
- Are required to publish a white paper approved by a national authority
- Must maintain reserves fully backed by high-quality liquid assets (e.g., cash or Treasury bills)
- Must enable daily redemption of tokens at par value
- Are prohibited from offering interest or yield-based programs to holders
For CASPs:
- Must obtain authorization from a national regulator
- Need to maintain sufficient capital reserves and insurance coverage
- Are expected to implement robust custody, IT security, and business continuity measures
- Must comply with rules governing market abuse, conflicts of interest, and consumer disclosures
Banks and e-money institutions may issue EMTs under their existing licenses, but must still comply with MiCA’s transparency and redemption obligations.
What MiCA Does Not Cover
Certain digital assets and activities remain outside MiCA’s scope. These include:
- Non-fungible tokens (NFTs) that are unique and not traded as a collection
- Central Bank Digital Currencies (CBDCs), such as the potential digital euro
- Security tokens, which remain regulated under MiFID II
- Loyalty points or closed-loop digital tokens used for store credit or within platforms
- Decentralized systems with no identifiable controlling entity
Importantly, MiCA avoids regulating the underlying blockchain technology. Its focus is on the issuance, custody, and commercialization of crypto-assets—not the protocols themselves.
When Will MiCA Take Effect?
MiCA enters into force in two phases:
- By June 30, 2024, rules applicable to issuers of ARTs and EMTs become effective.
- By December 30, 2024, rules for CASPs and general token issuers are enforceable.
Firms that already operate under existing national frameworks will need to align their compliance programs accordingly. Many will require a full gap analysis and potentially a complete restructuring of licensing, documentation, and operating models.
Strategic Considerations for Founders and Crypto Businesses
MiCA is more than just a legal hurdle—it’s a strategic catalyst. Companies that prepare early can benefit from greater investor confidence, simplified cross-border operations, and enhanced legal clarity.
Here’s how to think about your strategy:
- If you operate a wallet, exchange, or trading platform targeting EU users, you will need a CASP license.
- If you issue stablecoins, MiCA’s reserve and redemption requirements will force structural changes.
- If your token project is marketing to EU users, your white paper must meet MiCA standards and be filed with authorities.
- If your company is based outside the EU but sells into it, MiCA likely applies to you.
If you’ve been relying on regulatory uncertainty as a competitive advantage, those days are over. The market is moving toward institutional-grade infrastructure—and MiCA is a step in that direction.
Who Stands to Gain—and Who Faces Headwinds
Crypto businesses with well-documented compliance policies and solid corporate governance are well-positioned to succeed under MiCA. Banks, stablecoin providers with robust reserve practices, and global fintechs with an EU presence all stand to benefit.
Those at risk include:
- Token issuers without 1:1 reserves
- Exchanges without licenses
- Projects using influencers without proper disclosures
- Operators of yield-bearing stablecoins or synthetic tokens
The winners will be those who treat compliance as a growth tool, not just a legal checkbox.
Final Thoughts
MiCA represents a historic evolution in digital asset law. The EU is creating a single, scalable market for compliant crypto businesses. Whether you’re a founder launching a new protocol or a fintech expanding your reach, understanding MiCA is essential to operating in Europe.
At Veritas Global, we help founders, fintech companies, and funds navigate European crypto regulation with confidence. From white paper compliance and licensing to legal structuring and cross-border planning, our team works alongside you to scale legally—across the EU and beyond.
Planning a launch or expansion into Europe? Contact us today to make sure your crypto business is MiCA-ready.
