Odaily Planet Daily reports: The competition phase for the European Union’s Markets in Crypto-Assets Regulation (MiCA) is coming to an end, but the real challenges for businesses are just beginning. The high cost of maintaining ongoing compliance systems may reshape the European crypto industry. The future competitive focus may shift from “who can obtain a license” to “who can afford regulatory costs,” driving companies to pursue scale through mergers and acquisitions, joint ventures, or partnerships with banks. As MiCA is gradually implemented and the UK’s crypto regulatory framework takes shape, the European crypto industry is entering a new phase of consolidation. Industry insiders believe that stringent regulatory requirements could spur a new wave of mergers and acquisitions, while collaboration between crypto-native firms and traditional financial institutions will further deepen.
This trend may be even more pronounced in the UK market. The UK Financial Conduct Authority (FCA) is developing a new regulatory framework for cryptoassets, expected to bring crypto businesses under the existing financial services regulatory regime, subjecting them to capital, operational, and client asset protection requirements similar to those imposed on traditional investment institutions. Steven Lightstone, partner at Morgan Lewis’s London office and co-head of the global fintech team, said the FCA aims to foster market competition and support new entrants, but its regulatory standards will be very strict when it comes to consumer protection. Unlike the EU’s standalone MiCA framework, the UK approach will directly leverage the existing financial regulatory system to oversee crypto businesses.
Meanwhile, increased regulatory certainty is driving European banks to accelerate their entry into the digital assets space. Simon Schneider, CEO of Sygnum Europe, noted that fewer than 20% of European banks currently offer crypto-related services, leaving a significant market gap. The greatest value of MiCA lies not merely in creating a new licensing framework, but in providing legal certainty for financial institutions entering the digital assets market. He cited Switzerland as an example: after the introduction of distributed ledger technology regulations, most major Swiss banks began offering digital asset services, and other parts of Europe may follow a similar path. In the future, banks are unlikely to replace crypto-native companies; instead, they are more likely to partner with specialized infrastructure providers in areas such as custody, brokerage, staking, and asset tokenization.
As companies that fail to obtain MiCA licenses gradually exit the European market, assets may further consolidate among regulated entities. However, Schneider believes that self-custody and institutional custody models will continue to coexist in the long term.
Industry insiders believe that the European crypto sector is entering a "regulation-driven consolidation cycle." For crypto startups that previously thrived on rapid innovation and asset-light models, future competitive advantages may no longer lie solely in technological speed, but rather in compliance capabilities, capital scale, and the ability to integrate with financial infrastructure. (CoinDesk)