Written by: Mankun

July 1, 2026, is not just an ordinary date on the calendar for projects still operating cryptocurrency businesses in Europe.

After this day, the longest transition period set by MiCA for existing cryptocurrency service providers within the EU will come to an end. Service providers that have conducted business under the old laws of member states but have not yet obtained MiCA authorization should implement an orderly exit plan, cease providing unauthorized cryptocurrency services to EU clients, and properly handle existing customer relationships and asset transfers. The previous model of relying on registration in one member state and then expanding to other European markets has thus reached its institutional end.

This is precisely why the EU CASP license becomes increasingly important after 2026. It is no longer just a "high-level license" that large exchanges, custodians, or established platforms need to consider; it has gradually become a formal market-entry status that must be prioritized when providing services such as wallets, exchanges, custody, trade execution, transfers, and asset management to EU clients.

What MiCA truly changes is not just the name of the license, but the transition of European cryptocurrency business from "registration by individual countries" to the new stage of "unified licensing, unified standards, and cross-border operations".

The EU CASP is not another national VASP registration

Before the full implementation of MiCA, European virtual asset regulation exhibited obvious fragmentation. Companies might complete local registration in Lithuania, Poland, France, Italy, or other member states, but the requirements for scope of business, capital, management personnel, and ongoing compliance were inconsistent across different countries, and registration in one country could not directly prove the company's right to conduct business throughout the EU.

MiCA changed this logic.

Under the MiCA framework, companies generally need to apply to the local regulatory authority in the member state where their registered office is located to become a Crypto-Asset Service Provider, or CASP. Once authorized, companies can provide cryptocurrency services covered by the license in other EU member states through a statutory notification procedure, without needing to apply for a full license with identical functionalities in each target market.

This does not mean that once a project obtains CASP authorization from one member state, it can conduct all businesses in Europe without restrictions. Companies can only provide services across borders within the scope of their original authorization and must still comply with consumer protection, anti-money laundering, marketing, and other applicable rules. However, compared to the previous requirement for multiple registrations in different countries, MiCA does offer a clearer EU single market access mechanism.

For project parties, the greatest commercial value of CASP is not "just another European certificate", but the ability to integrate customers, businesses, and institutional collaborations from different member states into a reusable and externally verifiable regulatory framework.

What businesses can a CASP license cover?

MiCA does not generically issue a "cryptocurrency license" to companies but categorizes the scope of cryptocurrency services according to actual business functions. Relevant services include custody and management of cryptocurrency on behalf of clients, operating cryptocurrency trading platforms, exchanging cryptocurrency for funds, exchanging between different cryptocurrencies, executing customer orders, distributing cryptocurrencies, receiving and transmitting orders, providing cryptocurrency consulting, portfolio management, and offering cryptocurrency transfer services on behalf of clients.

Therefore, even a stablecoin payment product aimed at corporate clients can have completely different regulatory characteristics. If the platform only provides a technical interface that does not control customers' assets, the CASP applicability may be relatively limited; but if the platform accepts customers' stablecoins, controls the consolidated wallet, completes asset exchanges, and transfers assets to merchants or suppliers according to customer instructions, it may simultaneously involve custody, exchange, and transfer services. If the platform further provides internal trading, order matching, or asset management functions, the required scope of authorization and compliance intensity will continue to increase.

CASP is not just a name that projects choose from the service list that sounds closest; rather, regulatory authorities judge what permissions should be granted based on the company's product functions, asset control methods, transaction processes, and contractual responsibilities.

MiCA also requires CASPs to maintain corresponding prudent safeguards. The prudent resources that a company needs to maintain are typically the higher value of the minimum capital requirements corresponding to its business category and 25% of the fixed management expenses from the previous year. The broader the license scope, and the closer the business is to trading platforms, custodians, and complex financial services, the higher the capital, governance, technology, and ongoing compliance responsibilities that companies usually must undertake.

A broader license scope does not necessarily mean greater advantages, as each additional business permission also means that the company needs to prove its capability to bear the corresponding responsibilities long-term.

Why are banks and institutional clients increasingly valuing CASP identity?

When banks, payment institutions, and institutional clients assess cryptocurrency projects, the most challenging issue is often not whether the company has registration documents, but rather what the registration in different countries really means, whether the license covers real business, and where the ultimate responsibility for client assets and regulatory compliance lies.

MiCA has increased the verifiability of CASP identity through unified licensing requirements and public regulatory information. The registration and database related to MiCA established by ESMA can be used to query authorized CASPs and other regulatory information. Collaborative institutions no longer need to rely solely on the license documents presented by the project but can further verify the company's licensing status, home country regulatory authority, and related regulatory records.

More importantly, CASP authorization is not merely a review of a set of written systems. ESMA emphasizes in the authorization regulatory materials that regulatory authorities need to focus on examining the company's actual operations, corporate governance, business plans, outsourcing arrangements, information technology, and anti-money laundering systems; for applicants with large-scale cross-border activities, complex group structures, or heavily relying on foreign outsourcing, deeper scrutiny should be conducted.

This means that a company able to obtain and maintain CASP authorization needs to demonstrate to regulatory authorities: there is a real EU entity and management arrangement for the project, the business plan aligns with the actual products, client assets and company assets can be distinguished, key technology and compliance functions are not entirely left abroad, and there are executable processing mechanisms in case of system failures, customer complaints, or market exits.

CASP cannot guarantee that banks will definitely open accounts, nor can it guarantee that large clients will definitely sign contracts, but it can provide a unified regulatory language for banks and institutional due diligence.

Non-EU projects will find it difficult to continue relying on "foreign entities for passive customer acquisition"

For some Asian or offshore cryptocurrency projects, the common approach in the past was to retain a foreign operating entity and assert that European clients actively sought out the platform, therefore the company did not need to obtain local licenses in the EU.

MiCA does retain a very limited exception for reverse solicitation, but ESMA clearly requires a strict and narrow interpretation of this exception. Only when clients voluntarily initiate requests to accept specific services can foreign companies provide services within that scope; if the project reaches EU clients through advertising, search engine optimization, social media, influencer promotion, EU affiliated company referrals, or other means, it may be deemed active solicitation and cannot continue to rely on this exception.

This has very direct implications for global projects. If the platform sets up a European language website, runs advertisements for the European market, configures EU sales staff, or continually directs through a European partner, it cannot merely write in the user agreement that "clients contact us proactively" as a substitute for a formal CASP pathway.

In the MiCA era, whether a project enters the EU market is no longer just about where the company is registered but must also consider who the company is actually marketing to, who is signing contracts, and which entity is genuinely providing the services.

CASP is important, but it is not a universal license for EU financial business

MiCA primarily covers cryptocurrency assets that are not regulated by other EU financial services laws. If a type of token constitutes a financial instrument based on its actual rights and economic attributes, it may be subject to the MiFID II securities regulatory framework rather than being categorized under MiCA simply because it uses blockchain technology.

For cryptocurrency payment projects, another critical issue to focus on is the connection between electronic money tokens and the regulation of payment services. If the platform transfers stablecoins that meet the definition of electronic money tokens on behalf of clients, some activities may simultaneously have payment service attributes; therefore, projects may need to consider not only MiCA CASP authorization but also evaluate payment institution licenses under PSD2, or collaborate with licensed payment institutions. The EBA has already issued specific opinions and transitional arrangements regarding the connection between MiCA and PSD2, indicating that the CASP identity does not automatically cover all stablecoin payment functions.

Similarly, CASP does not automatically cover client fiat accounts, merchant acquiring services, bank cards, electronic money issuance, or traditional cross-border remittances. A payment platform connecting stablecoins and fiat currencies usually requires the CASP entity to undertake cryptocurrency services, and then have PI, EMI, banks, or other payment institutions complete the fiat side functions.

CASP addresses the identity of cryptocurrency asset service but a complete cryptocurrency payment business still requires separating the digital asset side and the fiat side into the correct regulatory frameworks.

Which projects should prioritize MiCA CASP?

The first category includes trading, wallet, custody, exchange, and payment platforms that have clearly identified the EU as a primary market and plan to provide long-term services to clients in multiple member states. If these projects continue to rely on offshore entities or old national registrations, not only will they struggle to support cross-border marketing and institutional collaborations, but they will also face direct market access issues after the maximum transition period ends.

The second category consists of projects preparing to collaborate with EU banks, EMIs, PIs, large merchants, or institutional clients. Such partners typically request projects to clarify the scope of CASP licenses, the method of controlling client assets, the home country regulatory authority, and the situation regarding cross-border notifications, as well as verify the actual roles of EU entities and foreign entities within the group.

The third category involves groups that have already reached a certain scale of transactions and wish to consolidate operations across multiple countries in Europe under a single regulatory entity. The MiCA passport mechanism can reduce the need for duplicate applications, but projects must choose a home member state with a real operational basis and align management, technology, compliance, and core decision-making arrangements with that entity.

Conversely, if a project is still in the product validation stage, lacks a clear customer and market plan in Europe, and is not temporarily planning to engage in marketing and ongoing services in the EU, initiating a CASP application may be too burdensome. A more reasonable approach would be to first clarify market boundaries, restrict EU business, and design future entity and product structures according to MiCA requirements in advance.

The importance of CASP comes from the fact that there is no longer a "fuzzy transitional zone" in the European market

When MiCA was just passed, the market was more focused on the fact that Europe finally has a unified set of cryptocurrency regulatory rules; by 2026, the truly important change is no longer the rules themselves, but that the longest transition period has ended, unauthorized projects need to exit, and banks and institutional clients have begun to re-evaluate partners according to MiCA standards.

For cryptocurrency projects wishing to enter Europe, CASP is not just a license to be temporarily placed in promotional materials but is the fundamental structure connecting customer access, cross-border operations, banking cooperation, and group responsibilities.

It cannot solve all fiat payment, stablecoin issuance, and securities regulatory issues, nor can it replace real teams and ongoing compliance capabilities; but if a project intends to provide cryptocurrency asset services in the EU long-term, CASP has gradually transitioned from being "worthy of consideration" to a regulatory entry that "must be clearly explained".

In the MiCA era, EU CASP is becoming increasingly important, not because Europe has added another license, but because Europe finally recognizes only one set of cryptocurrency asset service identities that can be uniformly supervised.