Since the MiCA framework finally came into force in December 2024, Europe has already issued licenses to over 50 crypto-related firms to operate under it. Among those companies are some of the world’s biggest players, including the likes of Coinbase, Kraken, and OKX.
For many in the industry, this was a long-awaited milestone — a single rulebook across 27 member states and the ability to “passport” services across borders. As a result, crypto businesses gained the ability to operate in the EU with much more comfort and under clearer compliance guidelines.
But depending on how you look at it, MiCA’s very strength — its ambition to bridge crypto and traditional finance — could also prove its greatest weakness. Decentralized crypto markets are very different in nature from TradFi, and by attempting to apply TradFi-inspired rules to this industry, Europe risks handcuffing it with rigid control that doesn’t fit here.
Let me explain in more detail what I mean by that.
Becoming MiCA-Compliant: Expectation vs Reality
The rush with which firms started applying for MiCA licenses shows how tired they’ve grown of dealing with patchwork regulation. Coinbase, for instance, secured its license in Luxembourg this June, which brought it into the EU’s legal perimeter. So, with that single approval, the company gains access to the entire EU market, instead of juggling 27 separate applications.
At the same time, MiCA confronts another big problem that lingers in crypto: trust. This industry has often been criticized for being too opaque, so introducing a clearer compliance framework is a major confidence boost in that regard. Operational practices, governance, and security standards are all rising to a new level of maturity. That is good news for businesses and their customers alike.
When put into practice however, complying with MiCA has not been easy. Crypto firms that are accustomed to moving quickly are now forced to deal with long, multi-step application processes and heavy documentation. MiCA has a long list of requirements, and many firms have had to readjust their operations and governance from the ground up just to qualify.
Yet another layer of complexity comes from MiCA’s phased rollout. Different rules come into force at different times, and many of the technical standards are still being written. This was an intentional approach, meant to give regulators and businesses alike time to adjust, but it also ended up causing a lot of uncertainty.
Companies must now track not just what MiCA requires, but also when each requirement kicks in. Since the full shape of the rules is still being created, what passes as compliant now may not be so a couple of months down the line.
This leaves companies floating in an uncomfortable zone of uncertainty. They are expected to serve customers while constantly splitting away their focus to watch closely for regulatory updates and adjusting long-term plans on the fly. This is a very big extra burden that gets in the way of stable operations.
Regulatory Divergence: Europe vs. the U.S.
Now let us temporarily shift away from Europe and look towards the United States, where we can see a very notable difference in terms of regulatory attitudes. For years, the U.S. regulation has been fragmented, with the SEC, CFTC, and various state authorities all pulling in different directions. Because they all had different stances on cryptocurrencies, this often left companies stuck in a confusing environment.
But 2025 has brought a positive shift in this regard. President Trump’s administration is very crypto-friendly and sets the goal of making America a “crypto capital.” As part of that transformation, agencies have now been tasked with figuring out better ways to cooperate. This may not solve everything overnight, but it does promise a clearer approach to crypto regulation in the future.
By contrast, in Europe, firms like Kraken have already rolled out MiCA-compliant services across all 30 EEA jurisdictions. This landmark shows how quickly MiCA’s passporting promise can work in practice, and how rigid the compliance framework has become compared to what the U.S. is now trying to design.
Still, even though MiCA gave Europe a first-mover advantage, there is a risk it could end up backfiring. That’s why the whole world is watching to see whether this early progress holds up once the full framework is in force.
If the U.S. pays attention and learns from its pitfalls, it could develop a more flexible framework. One that is better tailored to crypto’s unique characteristics instead of borrowing heavily from TradFi laws, as MiCA has done. If this actually happens, the U.S. could become a more attractive destination for crypto companies compared to Europe.
And history actually supports this possibility. When Europe launched MiFID, it was seen as a new gold standard for securities regulation. But the U.S. never replicated it outright. Instead, it adjusted its own rules — often with lighter requirements — and still managed to keep its capital markets dynamic. MiCA could follow the same path: a bold European blueprint that others selectively borrow from, but do not fully adopt.
The Next Battleground: Tokenized Real-World Assets
One area where the regulatory debate is only just beginning is the tokenization of real-world assets (RWAs) like real estate, art, bonds, or commodities. MiCA’s framework only briefly touches on this asset category and doesn’t go in-depth, but it is inevitable that regulators will eventually have to address it.
But then we still come back to the same core challenge: how to create safeguards without overregulating? If the rules are too lax, systemic risks like fraud could grow, damaging the market’s stability. But if they are too strict, projects will leave Europe for friendlier jurisdictions, causing it to lose out in the innovation race.
Finding the right balance is going to be the hardest part, just like it already is with MiCA. Whether Europe has built a model for the future or a cage for its own crypto ambitions — that remains to be seen.
Disclaimer: The opinions in this article are the writer’s own and do not necessarily represent the views of Cryptonews.com. This article is meant to provide a broad perspective on its topic and should not be taken as professional advice.
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