Several firms have even asked if OXK, which obtained a MiCA license from Malta over a year ago, would acquire them, simply because they can’t afford the cost of compliance, he said.
Do what it’s designed to do
MiCA first took effect on June 30, 2024, with rules governing stablecoins. The full body of regulations kicked in six months later, though firms with existing registrations were grandfathered in until July 1 this year. MiCA licenses, issued by a national regulator, permit companies to operate throughout the European Economic Area (EEA), which comprises the 27-nation European Union as well as Norway, Iceland, and Liechtenstein.
The European Securities and Markets Authority (ESMA), the EU’s financial rule-setter, has already called for unauthorized crypto-asset service providers to wind down their businesses in an orderly manner, while safeguarding clients’ interests, as the MiCA transitional period comes to an end.
The view could be taken that this is just what regulation is designed to do: MiCA has raised the compliance threshold and will eradicate firms that cannot meet that standard. On the other hand, there are concerns the cost of compliance is pricing out smaller firms and destroying innovation.
MiCA costs depend on the size of the firm, and there’s also the price of other licenses a firm might need. This might include an electronic money institution (EMI) license, which allows firms to process payments across the EEA, for example.
