In 2023, around a thousand new cryptocurrency businesses were officially registered in the European Union (EU). In the coming months, EU member states are expected to face difficulties in attracting crypto entrepreneurs willing to accept the rules outlined in the MiCA law.
To gain access to the EU market, companies wishing to obtain a licence will have to choose a specific state in which to have their licence application considered. The #Czech Republic is the leader in this regard, with 9,372 registered virtual service providers, mostly consisting of private individuals.
Poland, in second position, also allows individuals to register as virtual asset service providers (VASPs). According to publicly available data, there are currently 1,067 crypto service providers registered in Poland's cryptocurrency registry.
During the last quarter of 2023, approximately twelve new VASPs were registered in #Poland every week.
It is important to note that existing #VASPs will not be eligible for a MiCA licence, which sets out criteria for capital, internal control and governance requirements.
In some countries, such as Poland, some companies use simple registration as a way to gain a foothold in the European market. MiCA requires legal entities to have a registered office in a European country.
Regulators at the European Securities and Markets Authority (#ESMA) have called on national authorities to crack down on the practice of using "mailboxes" to register virtual service providers.
In addition, regulators have issued directives instructing firms to immediately begin preparing for MiCA implementation. MiCA represents the EU's first legislative proposal concerning the cryptocurrency sector. It sets clear guidelines for market participants, ensuring consumer protection, financial stability and encouraging innovation. The EU MiCA bill introduces licensing and regulatory standards for stable coins and strengthens #anti-money laundering measures.
While the #EU remains at the forefront of cryptocurrency regulation compared to other regions, the implementation of #MiCA has a number of potential drawbacks, including increased compliance costs, potential damage of user anonymity, and the risk of over-regulation.
