EU Adviser Says MiCA 2 Crypto Framework Is Likely

The European Union's Markets in Crypto-Assets regulation, or MiCA, creates a unified framework governing crypto-asset issuance and service providers. However, licensing applications, capital requirements and cross-border compliance procedures have also raised operational barriers. By comparison, Dubai's Virtual Assets Regulatory Authority, or VARA, provides a dedicated licensing regime, while the city can serve as a base for expansion into Global South markets across Asia, Africa and elsewhere.

With MiCA's transition period set to expire on July 1, European crypto founders are reassessing where to base their operations, and some companies are preparing to relocate their businesses to the United Arab Emirates. Dubai is attracting firms with faster licensing and a clearly designated regulatory point of contact. The report did not disclose the total number of companies planning to move, the amount of investment involved or individual firms' compliance costs.

The EU’s Markets in Crypto-Assets Regulation (MiCA) took effect on June 29, 2023, with provisions for asset-referenced tokens (ARTs) and electronic money tokens (EMTs) applying from June 30, 2024. The European Banking Authority (EBA) directly supervises issuers of significant tokens, making harmonized penalties critical to stablecoin governance, holder protection and consistent cross-border enforcement.

On June 26, 2026, the EBA published a consultation paper outlining its method for calculating fines. Issuers of significant ARTs that intentionally or negligently breach the rules could be fined up to 12.5% of their revenue in the preceding financial year, while the ceiling for issuers of significant EMTs would be 10%. Where gains from a violation or losses avoided can be determined, fines could reach twice that amount. The public consultation runs through September 28, and an online hearing was held on July 16.

The European Union's Markets in Crypto-Assets Regulation, or MiCA, establishes uniform rules for crypto-asset issuance, trading and service providers, while imposing stricter requirements on stablecoins. As stablecoin payments and decentralized finance, or DeFi, expand rapidly, restrictions on interest and the potential regulation of decentralized services have become critical issues for market competition and investor protection.

The European Commission recently opened a public consultation on whether MiCA's existing digital-asset framework remains fit for market needs. The review focuses on stablecoin interest rules and potential loopholes that could allow DeFi businesses to exploit classification definitions to avoid regulation. Industry participants may submit comments through August 31, and the feedback will inform discussions about amendments widely referred to as “MiCA 2.0.”

The European Union's Markets in Crypto-Assets Regulation, or MiCA, establishes consistent rules for crypto assets across member states and became fully applicable on December 30, 2024. It strengthens requirements for authorization, disclosure, asset custody and consumer protection. The rules could accelerate the departure of platforms facing higher compliance costs or lacking a strong regulatory foundation from the EU market.

Swiss crypto wealth manager SwissBorg has obtained a MiCA license and plans to move the center of its European operations to France to meet stricter transparency and disclosure standards. As MiCA enters the full enforcement stage, SwissBorg expects the number of crypto firms operating in the EU to decline, while licensed platforms can use a single authorization to expand across the region.