MiCA Consolidates European Crypto Market, Leaving Many Firms Behind

TRM Labs' recent report has shed light on the effects of MiCA's full implementation in Europe, which has led to a significant consolidation of the crypto market. With only about 20% of existing firms receiving authorization to operate, the regulation has successfully isolated high-risk companies from reaching European customers.

The grandfathering period established by MiCA ended in Europe, and TRM Labs found that only roughly a fifth (281 of 1,343) of pre-MiCA crypto organizations applied and received authorization. Jurisdictions with looser registration requirements were hit the most, with none of the over 1,800 crypto organizations registered in Poland receiving MiCA authorization.

On the other hand, jurisdictions that embarked on licensing early, such as Germany, concentrated the vast majority of registered crypto firms. Germany's BaFin authorized 55 firms, while French and Dutch regulators licensed 29 companies each. However, despite this consolidation, MiCA has had negative effects on European access to stablecoins.