MiCA Era: Why the EU CASP License Is Becoming Increasingly Important

July 1, 2026, is not just an ordinary date on the calendar for projects still operating cryptocurrency businesses in Europe.

After this day, the maximum transition period established by MiCA for existing crypto-asset service providers ended across the European Union. Service providers that had previously operated under member states’ former regulations but had not yet obtained MiCA authorization must implement orderly exit arrangements, cease providing unauthorized crypto-asset services to EU customers, and properly manage existing client relationships and asset transfers. The model of registering as a VASP in one member state and then expanding services to other European markets has now reached its regulatory conclusion.

This is precisely why the EU's CASP license is becoming increasingly important after 2026. It is no longer merely an "advanced license" considered only by large exchanges, custodians, or established platforms, but is gradually becoming a mandatory market access credential that must be prioritized when providing services such as wallets, exchanges, custody, trade execution, transfers, and asset management to EU customers.

What MiCA truly changes is not just the name of the license, but the transition of Europe’s crypto industry from a system of “individual country registrations” to a new phase of “unified authorization, unified standards, and cross-border operations.”

Before the full implementation of MiCA, regulation of virtual assets in Europe was notably fragmented. Companies might register locally in Lithuania, Poland, France, Italy, or other member states, but requirements regarding scope of business, capital adequacy, management personnel, and ongoing compliance varied across countries, and registration in one country did not automatically grant the right to operate continuously across the entire EU.

MiCA has changed this logic.

Under the MiCA framework, companies must, in principle, apply to the local competent authority in the member state where they are registered for authorization as a Crypto-Asset Service Provider (CASP). Once authorized, companies can offer crypto-asset services covered by their license in other EU member states through a statutory cross-border notification procedure, without needing to reapply for a full set of equivalent licenses in each target market.

This does not mean that a project granted a CASP authorization by one member state can operate freely across all areas in Europe. Companies can only offer services跨境 within the scope of their original authorization and must still comply with consumer protection, anti-money laundering, marketing, and other applicable rules. However, compared to the previous requirement of repeated registrations in multiple countries, MiCA does provide a clearer, unified mechanism for market access across the EU.

For project teams, CASP’s greatest business value is not simply “another European certificate,” but rather the ability to integrate customers, business operations, and institutional partnerships from different member states into a reusable, externally verifiable regulatory framework.

MiCA does not issue a generic "crypto license" to businesses; instead, it categorizes crypto asset services based on their actual business functions. Relevant services include custody and management of crypto assets on behalf of clients, operation of crypto asset trading platforms, exchange between crypto assets and fiat currency, exchange between different crypto assets, execution of client orders, placement of crypto assets, receipt and transmission of orders, provision of crypto asset advisory services, portfolio management, and transfer of crypto assets on behalf of clients.

Therefore, a stablecoin payment product aimed at enterprise customers may have entirely different regulatory implications. If the platform only provides a technical interface without controlling customer assets, the scope of CASP may be relatively limited; however, if the platform receives customer stablecoins, controls aggregated wallets, completes asset conversions, and transfers assets to merchants or suppliers according to customer instructions, it may simultaneously involve custody, conversion, and transfer services. If the platform further offers internal transactions, order matching, or asset management functions, the required scope of authorization and level of compliance will continue to increase.

CASP is not a name that a project selects from a service list based on what sounds closest; rather, regulators determine which permissions a company should receive based on its product features, asset control methods, transaction processes, and contractual responsibilities.

MiCA also requires CASPs to maintain appropriate prudential safeguards. The prudential resources that firms must hold are typically the higher of the minimum capital requirement corresponding to their business category or 25% of the previous year’s fixed overhead costs. The broader the license scope and the more closely the business aligns with trading platforms, custody services, or complex financial services, the higher the capital, governance, technical, and ongoing compliance obligations typically become.

A broader license scope does not necessarily confer an advantage, as each additional business authorization also means the company must demonstrate its ability to consistently assume the corresponding responsibilities.

When evaluating crypto projects, banks, payment institutions, and institutional clients often find the most challenging issues are not whether a company has registration documents, but what registration in different countries actually means, whether licenses cover actual business operations, and which entity ultimately bears responsibility for customer assets and regulatory compliance.

MiCA enhances the verifiability of CASP identities by standardizing authorization requirements and making regulatory information publicly available. The ESMA-established MiCA-related registry and database allow users to query authorized CASPs and other regulatory information. Partner institutions no longer need to rely solely on licensing documents provided by projects themselves but can further verify a company’s authorization status, home country regulator, and related regulatory records.

More importantly, CASP authorization is not merely a review of written policies. ESMA emphasizes in its authorization guidance that regulators must focus on the applicant’s actual operations, corporate governance, business plan, outsourcing arrangements, information technology systems, and anti-money laundering framework; for applicants with significant cross-border activities, complex group structures, or heavy reliance on overseas outsourcing, a more in-depth review is required.

This means that a company seeking to obtain and maintain a CASP license must demonstrate to regulators that the project has genuine EU-based entities and management arrangements, that its business plan aligns with actual products and services, that client assets are clearly segregated from company assets, that critical technologies and compliance functions are not entirely retained overseas, and that actionable procedures are in place to handle system failures, customer complaints, or market exit.

CASP cannot guarantee bank account opening or ensure that large clients will sign contracts, but it provides a standardized regulatory language for bank and institutional due diligence.

For certain Asian or offshore crypto projects, the traditional approach has been to maintain an overseas operating entity and argue that European clients initiated contact with the platform, thereby eliminating the need for the company to obtain a local license within the EU.

MiCA does retain a very limited reverse solicitation exception, but ESMA has explicitly required that this exception be interpreted strictly and narrowly. An overseas firm may only provide services within this scope if the client independently and entirely on their own initiative requests to receive a specific service; if the project reaches EU clients through advertising, search engine optimization, social media, influencer promotions, referrals from EU-affiliated companies, or other means, it may be deemed active solicitation and thus cannot continue to rely on this exception.

The impact on this global project is very direct. If the platform sets up a website in European languages, runs advertising campaigns targeting the European market, hires sales personnel in the EU, or receives consistent traffic from European partners, it cannot simply rely on a single line in the user agreement stating “customers contact us voluntarily” as a substitute for a formal CASP pathway.

In the MiCA era, whether a project enters the EU market depends not only on where the company is registered, but more importantly on who the company is marketing to, who is entering into contracts, and which entity is actually providing the service.

MiCA primarily covers crypto-assets not otherwise regulated by other EU financial services laws. If a type of token constitutes a financial instrument based on its actual rights and economic characteristics, it may be subject to securities regulatory frameworks such as MiFID II, rather than automatically falling under MiCA simply because it uses blockchain technology.

For cryptocurrency payment projects, another critical issue to address is the alignment between electronic money tokens and payment services regulation. If a platform transfers stablecoins that meet the definition of electronic money tokens on behalf of its clients, certain activities may also constitute payment services. As a result, in addition to MiCA CASP authorization, the project may need to assess whether it requires a payment institution license under PSD2 or should partner with a licensed payment institution. The EBA has already issued specific guidance and transitional arrangements regarding the interface between MiCA and PSD2, clarifying that CASP status does not automatically cover all stablecoin payment functions.

Similarly, CASP cannot automatically cover customer fiat accounts, merchant acquiring, bank cards, electronic money issuance, or traditional cross-border remittances. A payment platform that connects both stablecoins and fiat currencies typically requires the CASP entity to handle cryptocurrency services, while fiat-side functions are completed by PI, EMI, banks, or other payment institutions.

CASP addresses the identity of crypto asset services, but a complete crypto payment business still requires placing the digital asset and fiat sides within their respective regulatory frameworks.

The first category consists of platforms that have clearly identified the European Union as their primary market and plan to serve customers across multiple member states long-term, including trading, wallet, custody, exchange, and payment services. If such projects continue to rely on offshore entities or existing national registrations, they will not only struggle to support cross-border marketing and institutional partnerships but will also directly face market access issues after the maximum transition period ends.

The second category involves projects seeking to collaborate with EU banks, EMI, PI, large merchants, or institutional clients. Such partners typically require clarification on the scope of the CASP license, the method of client asset control, the home country regulator, and cross-border notification arrangements, as well as verification of the genuine division of responsibilities between EU entities and overseas entities within the group.

The third category consists of groups that have already achieved a certain trading volume and wish to consolidate their operations across multiple European countries under a single regulatory authority. The MiCA passport mechanism can reduce duplicate applications, but the project must select a home member state with genuine operational foundations and ensure that its management, technology, compliance, and core decision-making structures are aligned with that entity.

Conversely, if the project is still in the product validation stage, lacks clear European customers and market plans, and is not yet preparing to conduct marketing or provide ongoing services in the EU, initiating a CASP application directly may be overly burdensome. A more prudent approach would be to first define market boundaries, restrict EU business activities, and proactively design the future entity and product structure in accordance with MiCA requirements.

When MiCA was first passed, the market focused primarily on the fact that Europe finally had a unified set of crypto regulations; by 2026, the more significant change is no longer the rules themselves, but the fact that the maximum transition period has ended, requiring unlicensed projects to exit, and banks and institutional clients are beginning to reassess their partners according to MiCA standards.

For crypto projects aiming to enter Europe, CASP is not a license to be temporarily featured in marketing materials, but rather the foundational infrastructure connecting customer access, cross-border operations, banking partnerships, and group responsibilities.

It cannot solve all fiat payment, stablecoin issuance, and securities regulatory issues, nor can it replace a genuine team and ongoing compliance capabilities; however, for projects preparing to offer crypto asset services long-term in the EU, CASP has gradually shifted from being “worth considering” to being a regulatory entry point that must be clearly explained.

In the MiCA era, EU CASPs are becoming increasingly important—not because Europe has added another license, but because Europe has finally recognized a single, uniformly supervised identity for crypto-asset services.

Article by Mankiw