The European Commission has a long-standing habit of checking its homework, and MiCA is next on its agenda. On Tuesday, Brussels launched an official consultation to collect comments on the work of the regulation.
For relevant stakeholders, exchanges, issuers and industry associations, this is an invitation to revisit the battlefield.
As the grandfathering period for MiCA approaches its end on July 1, preliminary findings suggest that the compliance cull has been profound.
In the years leading up to the implementation of MiCA, the European cryptocurrency sector was a fragmented but broad ecosystem. Industry estimates suggested that between 1,100 and 1,300 cryptoasset service providers (CASPs) were active across the union, operating under a patchwork of national regulations.
Today, that number has virtually collapsed. As of May, only 200 CASPs were authorized under the new harmonized rules.
In Cyprus, only 12 entities have obtained the licence. Interestingly, seven of these companies are not cryptocurrency companies yet Established retail brokerssuch as Capital.com, eToro, and XTB, which have expanded to include spot cryptocurrencies Part of a broader multi-asset strategy.
Entry cost
This is a high attrition rate It wasn’t entirely unexpected. Przemyslaw Kral, CEO of zondacrypto, had previously given a frank assessment of the situation: “Smaller crypto companies, especially those with limited resources, may be forced to leave the EU market as a result of high compliance costs.”
Krall’s observation highlights a fundamental tension within MiCA. By setting a high ceiling on entry, Brussels has succeeded in legitimizing the sector, but it has done so by creating a cost curve that acts as a vertical wall for small businesses.
The garage startup era of European cryptocurrencies is being replaced by a corporate landscape dominated by well-capitalized established companies.
The current consultation is likely to reveal whether this consolidation has improved market integrity or simply stifled innovation by pricing out the next generation of fintech entrepreneurs.
Stablecoin friction
While the number of CASPs is a point of concern, the stablecoin system remains the most charged aspect of the framework.
actually, MiCA has provided much needed legal clarity, But criticism was directed at capital reserves and the maximum limits imposed on exporters.
These measures appear to be carefully calibrated to meet EU policy objectives, specifically maintaining monetary sovereignty, not pure market neutrality.
The licensing system is also noticeably cumbersome. To issue a compliant stablecoin under MiCA, an entity must also obtain an Electronic Money Institution (EMI) licence. Once again, this dual requirement creates a bottleneck that discourages smaller players.
The most obvious tension concerns Tether (USDT), the world’s largest stablecoin with a market cap of between US$185 and US$190 billion. USDT currently lacks a MiCA license, leading regulated exchanges like Kraken, Coinbase, and Crypto.com. To remove it from the list for EU users.
This has created an opportunity for MiCA-compliant alternatives such as Circle’s USDC and its euro-denominated counterparts.
In fact, Circle’s Euro stablecoin grew six-fold between January 2025 and March 2026.
EURC portfolio share increased more than 6-fold from January 2025 to March 2026.
As adoption expands, the use of euro-denominated stablecoins is reaching a wider range of on-chain users and applications. pic.twitter.com/VsKTZlNKuU
– Circle (@circle) May 15, 2026
Danger of a two-tier system?
However, the EU’s attempt to take non-compliant stablecoins out of the market carries familiar risks. There is a clear precedent for this: the product intervention measures introduced by the Emirates Authority for Standardization and Metrology in 2018.
Those restrictions did Do not reduce retail demand for CFDs; They have pushed it towards offshore jurisdictions where European regulators have no oversight.
A similar migration process may occur in cryptocurrencies. The risk is that customers will migrate to third-party platforms that do not impose such restrictions.
By trying to protect the domestic market, the EU may be inadvertently making its investors less safe by forcing them to live in unregulated places.
As the Commission begins its review, the key question is whether MICA will serve as a growth engine for a mature market or whether it will create a two-tier system.
For the 80% of companies that have already disappeared, the answer will arrive too late.
The European Commission has a long-standing habit of checking its homework, and MiCA is next on its agenda. On Tuesday, Brussels launched an official consultation to collect comments on the work of the regulation.
For relevant stakeholders, exchanges, issuers and industry associations, this is an invitation to revisit the battlefield.
As the grandfathering period for MiCA approaches its end on July 1, preliminary findings suggest that the compliance cull has been profound.
In the years leading up to the implementation of MiCA, the European cryptocurrency sector was a fragmented but broad ecosystem. Industry estimates suggested that between 1,100 and 1,300 cryptoasset service providers (CASPs) were active across the union, operating under a patchwork of national regulations.
Today, that number has virtually collapsed. As of May, only 200 CASPs were authorized under the new harmonized rules.
In Cyprus, only 12 entities have obtained the licence. Interestingly, seven of these companies are not cryptocurrency companies yet Established retail brokerssuch as Capital.com, eToro, and XTB, which have expanded to include spot cryptocurrencies Part of a broader multi-asset strategy.
Entry cost
This is a high attrition rate It wasn’t entirely unexpected. Przemyslaw Kral, CEO of zondacrypto, had previously given a frank assessment of the situation: “Smaller crypto companies, especially those with limited resources, may be forced to leave the EU market as a result of high compliance costs.”
Krall’s observation highlights a fundamental tension within MiCA. By setting a high ceiling on entry, Brussels has succeeded in legitimizing the sector, but it has done so by creating a cost curve that acts as a vertical wall for small businesses.
The garage startup era of European cryptocurrencies is being replaced by a corporate landscape dominated by well-capitalized established companies.
The current consultation is likely to reveal whether this consolidation has improved market integrity or simply stifled innovation by pricing out the next generation of fintech entrepreneurs.
Stablecoin friction
While the number of CASPs is a point of concern, the stablecoin system remains the most charged aspect of the framework.
actually, MiCA has provided much needed legal clarity, But criticism was directed at capital reserves and the maximum limits imposed on exporters.
These measures appear to be carefully calibrated to meet EU policy objectives, specifically maintaining monetary sovereignty, not pure market neutrality.
The licensing system is also noticeably cumbersome. To issue a compliant stablecoin under MiCA, an entity must also obtain an Electronic Money Institution (EMI) licence. Once again, this dual requirement creates a bottleneck that discourages smaller players.
The most obvious tension concerns Tether (USDT), the world’s largest stablecoin with a market cap of between US$185 and US$190 billion. USDT currently lacks a MiCA license, leading regulated exchanges like Kraken, Coinbase, and Crypto.com. To remove it from the list for EU users.
This has created an opportunity for MiCA-compliant alternatives such as Circle’s USDC and its euro-denominated counterparts.
In fact, Circle’s Euro stablecoin grew six-fold between January 2025 and March 2026.
EURC portfolio share increased more than 6-fold from January 2025 to March 2026.
As adoption expands, the use of euro-denominated stablecoins is reaching a wider range of on-chain users and applications. pic.twitter.com/VsKTZlNKuU
– Circle (@circle) May 15, 2026
Danger of a two-tier system?
However, the EU’s attempt to take non-compliant stablecoins out of the market carries familiar risks. There is a clear precedent for this: the product intervention measures introduced by the Emirates Authority for Standardization and Metrology in 2018.
Those restrictions did Do not reduce retail demand for CFDs; They have pushed it towards offshore jurisdictions where European regulators have no oversight.
A similar migration process may occur in cryptocurrencies. The risk is that customers will migrate to third-party platforms that do not impose such restrictions.
By trying to protect the domestic market, the EU may be inadvertently making its investors less safe by forcing them to live in unregulated places.
As the Commission begins its review, the key question is whether MICA will serve as a growth engine for a mature market or whether it will create a two-tier system.
For the 80% of companies that have already disappeared, the answer will arrive too late.
