MiCA Review Must Balance Market Protection with Proportionate Rules

MiCA review — As the European Commission’s consultation on reviewing the Markets in Crypto-Assets (MiCA) regulation closes, industry voices are calling for a calibration that protects the single market without imposing disproportionate costs.

The opinion piece argues that MiCA’s core achievement is creating a unified rulebook, allowing crypto asset service providers (CASPs) authorized in one EU member state to passport services across the entire bloc. This transforms 30 fragmented markets into a single addressable market for roughly 450 million people, providing a compelling reason for firms to build in Europe.

The central question for the review is whether the obligations for market access remain proportionate to the scale of the market they unlock. The author contends regulation should focus on areas with real risks, such as client money and market integrity, and that rules should be retained only if they address a clear, material risk.

A key concern highlighted is the rising compliance cost for CASPs, which can disproportionately affect smaller firms and new entrants, potentially stifling competition and innovation. The piece warns that if the review adds to the regulatory burden without clear risk-based justification, it could result in a safer but smaller and less dynamic market.