Germany Dominates EU Crypto Regulation Amid Sanctions Crackdown

Germany remains the top destination for crypto-asset service providers (CASPs) seeking to operate in the European Union under the Markets in Crypto-Assets (MiCA) regulation. In August, Germany added 10 cooperative banks to its list of authorized CASPs, bringing the total number of firms authorized by German authorities to 20 since the beginning of the month.

The EU's MiCA framework, which came into force on December 30, 2024, requires CASPs operating in the EU to apply for a license and obtain authorization from their national competent authority. With over 70 new additions to ESMA's MiCA register since July 1, when the transitional deadline passed, Germany has solidified its position as the leading issuer of MiCA licenses.

However, not all crypto-related developments in the EU have been positive for the industry. In an effort to prevent Russia from accessing alternative financial and crypto channels that could undermine the effectiveness of EU restrictions, 14 non-EU CASPs were added to a transaction ban list on August 23, including major international crypto-asset exchange HTX.

Separately, the European Central Bank (ECB) is pushing ahead with its digital euro plan, despite concerns around privacy. ECB Executive Board member Piero Cipollone sought to assuage these fears in a recent interview, highlighting the benefits of reducing Europe's dependence on predominantly non-European payment networks.