How Will MiCA Impact the Crypto Industry?

The crypto industry in the European Union is set to get a major boost especially with respect to VC funding
By Godfrey Benjamin
Updated April 25, 2025

The Markets in Crypto Assets (MiCA) regulation was introduced by the European Commission in September 2020, with the aim of creating a harmonized regulatory framework for crypto assets across the European Union (EU). The regulations cover a wide range of issues, including the issuance and trading of crypto assets, the operation of crypto assets service providers, and the protection of investors.

Undoubtedly regulatory clarity is a major determinant in instilling confidence among investors. According to insights gleaned from a Twitter post, VC investment in the EU is up by about 5.9% in the first quarter of 2022 to 47.6% in Q1 of 2023. This significant leap represents about 10X growth in about a year in the influx of VC investments since the novel MiCA bill was approved.

Advertisement
Advertisement

Impacts of Clear Regulations

With clear regulations in the form of MiCA, the EU with a market of 450 million consumers is clearly on its path to becoming the next hub for crypto projects. Recall that as many as 517 European lawmakers voted in favor of the MiCA, while 38 decided to vote against it, a sign that the support for comprehensive regulation is high.

Prior to the introduction of the MiCA bill, there was a lack of clear regulatory guidelines for crypto assets in Europe. This resulted in a situation where investors were uncertain about the level of protection they could expect when investing in crypto assets.

However, the MiCA bill has addressed this issue by providing a harmonized regulatory framework that establishes clear rules and standards for the issuance and trading of crypto assets.

Advertisement
Advertisement

MiCA Set to Shape the Crypto Industry

Under the regulations, all crypto asset services providers like exchanges, wallet providers, and other service providers will be required to obtain a license from their national regulator in order to operate in the EU. 

Likewise, the MiCA regulations also introduce a number of new requirements for crypto assets issuers. Issuers will be required to provide detailed disclosures to investors, including information about the underlying assets and the risks associated with investing in the asset. 

Another key aspect of the MiCA regulation is the introduction of a framework for stablecoins. As such, the MiCA regulations create a new category of stablecoins called “asset-referenced tokens”, which are subject to a lighter regulatory regime than other types of crypto assets.

Advertisement
Godfrey Benjamin
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture. Follow him on X, Linkedin
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.