MiCA regulation explained: how the EU rules crypto

MiCA (Markets in Crypto-Assets, Regulation (EU) 2023/1114) is the European Union's single rulebook for crypto. It applies directly in all 27 member states: exchanges, brokers and custodians need a crypto-asset service provider (CASP) licence, and stablecoin issuers need authorisation and full reserves. The regulation has applied in full since December 30, 2024, and the transition period for existing firms ended on July 1, 2026. Since then, only companies listed in ESMA's register can legally serve EU customers.

What is MiCA and who does it cover?

MiCA replaced a patchwork of national regimes. France used to register crypto firms as PSANs, Germany licensed them through BaFin, Lithuania ran its own VASP register. Now the rules are the same everywhere, and a licence from one country is "passported" across the whole bloc.

The regulation sorts crypto-assets into three buckets:

Article 2 spells out what MiCA does not cover: genuinely unique, non-fungible tokens (NFTs), crypto-assets that are really securities or deposits (those fall under MiFID II and banking law), and central banks including the ECB. Nobody issues bitcoin, so it needs no white paper, but the exchange you buy it from must be licensed.

When did MiCA come into force? Key dates

The rollout was staged (Article 149, Article 143):

1. June 29, 2023 — the regulation entered into force and regulators began drafting technical standards.
2. June 30, 2024 — Titles III and IV kicked in: the stablecoin rules for ARTs and EMTs.
3. December 30, 2024 — MiCA applies in full, including CASP licensing.
4. July 1, 2026 — the longest possible grandfathering period ended for firms operating under national law before December 30, 2024. Member states could shorten it, and several did.
5. December 31, 2027 — trading platforms must have white papers in place for tokens admitted to trading before December 30, 2024.

The CASP licence: what exchanges and brokers must do

A crypto-asset service provider is any exchange, broker, custodian, transfer service, order-routing platform or adviser. The licence comes from the regulator in the firm's home country and then works EU-wide.

Minimum capital depends on the services offered (A&O Shearman):

Beyond capital, licensed firms must segregate client assets from their own, run a complaints process, manage conflicts of interest, disclose fees and keep an orderly wind-down plan. A separate title bans insider dealing and market manipulation, bringing stock-market-style market abuse rules to crypto.

Retail buyers also get a direct protection: when you buy a newly offered token from the issuer or through a placing intermediary, you have 14 calendar days to cancel without fees or a reason. That does not apply to ordinary secondary-market trading on an exchange.

How MiCA regulates stablecoins

Stablecoins face the strictest rules because they can work like money. An e-money token issuer must hold an EU banking or e-money licence, redeem tokens at par on request and pay no interest on them.

Reserves work like this (Article 54): at least 30% of funds must always sit in segregated accounts at credit institutions, with the rest in highly liquid instruments in the token's reference currency. For significant tokens the deposit floor rises to 60%, according to the EBA's final report on liquidity standards.

Tokens pegged to a non-EU currency such as the dollar face a usage cap. If one is used for payments more than 1 million times a day, or for more than €200 million a day, on a quarterly average within a single currency area, the issuer must stop issuing and submit a plan to bring usage down (Article 23). It's the EU's guard against dollarisation through stablecoins.

What that means in practice:

• USDC is issued in the EU by Circle's French subsidiary, which holds an e-money licence. On October 14, 2026, the EBA classified USDC as the EU's first significant e-money token, and from November 12, 2026, its issuer is supervised by the EBA alongside France's ACPR. More in our news story.
• USDT never got authorisation. According to The Paypers, it disappeared from licensed EU exchanges after July 1, 2026, and a Tether representative called the requirement to keep 60% of reserves in European banks a systemic risk.
• On October 8, 2026, ESMA told licensed firms to stop all services involving such stablecoins and to wind down client holdings within three months, meaning by January 8, 2027 (our report).

EU residents can still hold USDT in their own wallets: MiCA regulates companies, not individual holders. For how USDT and USDC differ in structure and risk, see USDT vs USDC.

What MiCA looks like as of November 10, 2026

We downloaded the CSV files of ESMA's interim register on November 10, 2026. The CASP list contains 397 entries covering 394 companies. Germany has issued the most licences with 122, followed by France (36), the Netherlands (29), Cyprus (25) and Malta (24). The register includes Coinbase (Luxembourg), Kraken (Ireland), OKX and Crypto.com (Malta), Bybit and Bitpanda (Austria) and Revolut (Cyprus). Binance is not on it. A separate list of firms operating without authorisation has 189 entries.

Binance in France shows what that means. According to Crypto Briefing, Binance's French entity did not secure a MiCA licence by July 1, 2026, was removed from the AMF's PSAN list on July 2, and will close all customer accounts on December 31, 2026. From November 29, leftover balances will be charged 0.025% a month, with a 10 USDC minimum (our story).

Stablecoin supply per DefiLlama on November 10, 2026: USDT at $176.2B in circulation, USDC at $70.3B, and EURC, the largest euro stablecoin, at €518.6M. Even with MiCA in place, euro stablecoins remain a niche. Bitcoin traded near $74,800 as of 3:00 AM ET on November 10; for live numbers, see our market dashboard.

How to check whether an exchange is MiCA-licensed

1. Open the MiCA page on ESMA's website and download the "Crypto-asset service providers" file.
2. Search for the exchange's legal entity, not the brand — the company named in your user agreement (for example "… Europe Ltd").
3. Check the country and the list of services: if the exchange holds your coins, custody must be among them.
4. Cross-check the list of unauthorised firms in the same ESMA section.
5. Make sure your account sits with the European subsidiary: global exchanges often run several entities, and EU clients should be served by the licensed one.

For a full checklist, see how to choose a crypto exchange.

Limitations of MiCA

• DeFi and fully decentralised services are largely out of scope: if a protocol has no intermediary, there's no one to license.
• NFTs are excluded as long as they are truly unique; large series of identical tokens may be treated as ordinary crypto-assets.
• Taxes are not part of MiCA. A separate directive, DAC8, applies from January 1, 2026: providers collect client transaction data, and the first exchange with tax authorities for 2026 is due by September 30, 2027. Our crypto taxes guide covers how the tax itself is calculated.
• A licence is not insurance. MiCA has no deposit guarantee like banks do: if a licensed exchange fails, you rely on asset segregation and the wind-down plan, not on state compensation.
• Non-EU firms can serve Europeans without a licence only when the client approaches them entirely on their own initiative. Marketing to EU residents breaks that exemption.

FAQ

Is USDT banned in the EU? No. You can own it and move it to your own wallet. But licensed EU exchanges don't list it for trading, and under ESMA's position they must stop servicing it entirely from January 8, 2027.

Does MiCA affect people outside the EU? Not directly. But large exchanges often extend European standards to all clients, and serve EU users through separate entities with different terms.

How is MiCA different from US crypto regulation? The EU has one regulation and one licence for the whole bloc. In the US, the SEC and CFTC split oversight and there is no single market-structure law — see our guide to US crypto regulation.

Do I need a licence just to hold bitcoin? No. MiCA covers companies that issue tokens or provide services, not individual holders or self-custody wallets.

This is not investment advice.