EU to Review MiCA, as 80% of Crypto Firms Vanish in | Crypto Work Pro
The European Commission has a long-standing behavior of checking its own homework and MiCA is subsequent up on the docket. On Tuesday, Brussels launched a formal session to collect suggestions on the functioning of the Regulation.
For the stakeholders concerned, the exchanges, the issuers, and the industry associations, that is an invitation to revisit the battlefield.
As the grandfathering period for MiCA approaches its finish on July 1, the preliminary outcomes recommend that the compliance cull has been deep.
In the years previous MiCA’s implementation, the European crypto sector was a fragmented however huge ecosystem. Industry estimates recommend that between 1,100 and 1,300 cryptoasset service suppliers (CASPs) had been lively throughout the union, working beneath a patchwork of national regimes.
Today, that quantity has successfully collapsed. As of May, solely 200 CASPs have been authorised beneath the new harmonised guidelines.
In Cyprus, solely 12 entities have secured authorisation. Tellingly, seven of these should not crypto-native corporations however established retail brokers, such as Capital.com, eToro, and XTB, which have expanded into spot crypto as half of a wider multi-asset strategy.
The Cost of Entry
This high attrition fee was not totally sudden. Przemysław Kral, the CEO of zondacrypto, had beforehand provided a blunt evaluation of the state of affairs: “Smaller crypto businesses, particularly those with limited resources, might be forced to quit the EU market as a result of high costs of compliance.”
Kral’s commentary highlights a basic pressure within MiCA. By setting a high bar for entry, Brussels has efficiently legitimised the sector, however it has finished so by creating a value curve that acts as a vertical wall for smaller companies.
The storage startup period of European crypto is being changed by a company panorama dominated by well-capitalised incumbents.
The present session will possible reveal whether or not this consolidation has improved market security or just stifled innovation by pricing out the subsequent era of fintech entrepreneurs.
The Stablecoin Friction
While the CASP rely is a level of concern, the stablecoin regime stays essentially the most charged side of the framework.
Indeed, MiCA has offered much-needed legal readability, however criticism has been directed on the capital buffers and caps imposed on issuers.
These measures seem to be tightly calibrated to meet EU coverage objectives, particularly the preservation of financial sovereignty, reasonably than pure market neutrality.
The licensing regime can be notably cumbersome. To challenge a compliant stablecoin beneath MiCA, an entity should additionally purchase an Electronic Money Institution (EMI) license. Again, this dual-layered requirement is a bottleneck that disfavours small gamers.
The most seen pressure entails Tether (USDT), the world’s largest stablecoin with a market capitalisation of between US$185 and 190 billion {dollars}. USDT at the moment lacks MiCA authorisation, main regulated exchanges such as Kraken, Coinbase and Crypto.com to delist it for EU customers.
This has created an opening for MiCA-compliant options like Circle’s USDC and its euro-denominated counterparts.
Indeed, Circle’s euro-stablecoin has grown sixfold between January 2025 and March 2026.
EURC wallet share grew more than 6x from January 2025 to March 2026.
As adoption expands, euro-denominated stablecoin utilization is reaching a broader set of customers and purposes onchain. pic.twitter.com/VsKTZlNKuU
— Circle (@circle) May 15, 2026
A Danger for a Two-Tier System?
However, the EU’s attempt to squeeze non-compliant stablecoins out of the market carries a acquainted risk. There is a clear precedent for this: the product intervention measures launched by ESMA in 2018.
Those restrictions did not abate retail demand for CFDs; they pushed it towards offshore jurisdictions the place European regulators have no oversight.
An analogous migration could happen in crypto. The hazard exists that purchasers will migrate to offshore-facing platforms that don’t impose such restrictions.
By making an attempt to shield the native market, the EU could inadvertently be making its buyers much less protected by forcing them into unregulated areas.
As the Commission begins its review, the central query is whether or not MiCA will serve as a growth driver for a mature market or whether or not it is going to create a two-tier system.
For the 80% of companies which have already vanished, the reply will arrive too late.
The European Commission has a long-standing behavior of checking its own homework and MiCA is subsequent up on the docket. On Tuesday, Brussels launched a formal session to collect suggestions on the functioning of the Regulation.
For the stakeholders concerned, the exchanges, the issuers, and the industry associations, that is an invitation to revisit the battlefield.
As the grandfathering period for MiCA approaches its finish on July 1, the preliminary outcomes recommend that the compliance cull has been deep.
In the years previous MiCA’s implementation, the European crypto sector was a fragmented however huge ecosystem. Industry estimates recommend that between 1,100 and 1,300 cryptoasset service suppliers (CASPs) had been lively throughout the union, working beneath a patchwork of national regimes.
Today, that quantity has successfully collapsed. As of May, solely 200 CASPs have been authorised beneath the new harmonised guidelines.
In Cyprus, solely 12 entities have secured authorisation. Tellingly, seven of these should not crypto-native corporations however established retail brokers, such as Capital.com, eToro, and XTB, which have expanded into spot crypto as half of a wider multi-asset strategy.
The Cost of Entry
This high attrition fee was not totally sudden. Przemysław Kral, the CEO of zondacrypto, had beforehand provided a blunt evaluation of the state of affairs: “Smaller crypto businesses, particularly those with limited resources, might be forced to quit the EU market as a result of high costs of compliance.”
Kral’s commentary highlights a basic pressure within MiCA. By setting a high bar for entry, Brussels has efficiently legitimised the sector, however it has finished so by creating a value curve that acts as a vertical wall for smaller companies.
The storage startup period of European crypto is being changed by a company panorama dominated by well-capitalised incumbents.
The present session will possible reveal whether or not this consolidation has improved market security or just stifled innovation by pricing out the subsequent era of fintech entrepreneurs.
The Stablecoin Friction
While the CASP rely is a level of concern, the stablecoin regime stays essentially the most charged side of the framework.
Indeed, MiCA has offered much-needed legal readability, however criticism has been directed on the capital buffers and caps imposed on issuers.
These measures seem to be tightly calibrated to meet EU coverage objectives, particularly the preservation of financial sovereignty, reasonably than pure market neutrality.
The licensing regime can be notably cumbersome. To challenge a compliant stablecoin beneath MiCA, an entity should additionally purchase an Electronic Money Institution (EMI) license. Again, this dual-layered requirement is a bottleneck that disfavours small gamers.
The most seen pressure entails Tether (USDT), the world’s largest stablecoin with a market capitalisation of between US$185 and 190 billion {dollars}. USDT at the moment lacks MiCA authorisation, main regulated exchanges such as Kraken, Coinbase and Crypto.com to delist it for EU customers.
This has created an opening for MiCA-compliant options like Circle’s USDC and its euro-denominated counterparts.
Indeed, Circle’s euro-stablecoin has grown sixfold between January 2025 and March 2026.
EURC wallet share grew more than 6x from January 2025 to March 2026.
As adoption expands, euro-denominated stablecoin utilization is reaching a broader set of customers and purposes onchain. pic.twitter.com/VsKTZlNKuU
— Circle (@circle) May 15, 2026
A Danger for a Two-Tier System?
However, the EU’s attempt to squeeze non-compliant stablecoins out of the market carries a acquainted risk. There is a clear precedent for this: the product intervention measures launched by ESMA in 2018.
Those restrictions did not abate retail demand for CFDs; they pushed it towards offshore jurisdictions the place European regulators have no oversight.
An analogous migration could happen in crypto. The hazard exists that purchasers will migrate to offshore-facing platforms that don’t impose such restrictions.
By making an attempt to shield the native market, the EU could inadvertently be making its buyers much less protected by forcing them into unregulated areas.
As the Commission begins its review, the central query is whether or not MiCA will serve as a growth driver for a mature market or whether or not it is going to create a two-tier system.
For the 80% of companies which have already vanished, the reply will arrive too late.
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