Europe is at a turning point in its effort to regulate digital assets. As the European Commission’s consultation on a review of the Markets in Crypto-Assets Regulation (MiCA) closes, the central question is whether the framework can protect consumers and market stability without making the European Union too expensive or complicated for crypto businesses to serve.
According to Cointelegraph, the review should preserve MiCA’s core achievement: a single rulebook for crypto assets across the bloc. The debate is now shifting toward proportionality, including whether the compliance obligations imposed on crypto-asset service providers (CASPs) match the risks they are intended to address.
One authorization, access to a large market
MiCA created a regulatory structure that had previously been missing from Europe’s digital-asset sector. Before its introduction, companies faced different national registration systems and requirements, while some countries had no dedicated crypto regime at all. That fragmentation made it more difficult for a provider to operate across borders.
Under MiCA, a CASP authorized in one EU member state can use passporting arrangements to offer its services across the European Union and European Economic Area. In practical terms, this allows a company to build one authorization and compliance structure for access to a market of roughly 450 million people, rather than designing separate arrangements for each national market.
That arrangement also gives customers more choice among licensed and supervised providers. Firms can compete on service, price, quality and security while operating under a common regulatory standard. For companies deciding where to establish or expand a digital-asset business, the size of the market unlocked by passporting is a major benefit.
MiCA has nevertheless raised the entry threshold. Authorization is more demanding, and compliance requires substantial systems, documentation and reporting. The issue for the review is therefore not whether regulation should exist, but whether the cost of meeting the requirements remains reasonable compared with the market access and protections it provides.
A risk-based test for regulation
The proposed direction for the review is to distinguish between activities that create significant risks and those that do not. Services involving customer funds, asset custody, market integrity or financial stability warrant strong supervisory safeguards. These are areas where failures can directly affect customers or the broader financial system.
The broader test should be whether a rule produces a meaningful reduction in risk. Regulatory regimes can become more complicated over time as new reporting, record-keeping and documentation obligations accumulate. Complexity alone, however, does not guarantee stronger protection.
A proportional review would examine each requirement and ask whether it addresses a clear and material risk. Obligations that meet that standard should remain. Those that do not could be simplified, combined or removed. The argument is not for abandoning oversight, but for making the rulebook more targeted and credible.
This distinction matters because compliance expenses do not affect every business equally. Large established companies may be better placed to absorb fixed authorization and operational costs, while smaller firms and new entrants face a heavier burden. If those costs become too high, regulation can reduce competition by making it harder for new providers to enter the market.
The proposals under discussion
The concern is the cumulative effect of the framework rather than one individual rule. If additional obligations increase costs without a clear risk-based justification, Europe could end up with fewer providers and less innovation without necessarily achieving a safer market. Digital-asset companies can also direct new investment toward jurisdictions where access to a comparable market involves less regulatory friction.
Cointelegraph’s discussion of the review points to several areas where the framework could be adjusted:
- **Different requirements according to size and risk:** A small startup with few clients would not necessarily present the same risks as a multinational managing billions of dollars. Tiers based on factors such as assets, client numbers or systemic importance could reduce the burden on smaller firms while retaining stronger oversight for larger providers.
- **Overlapping licenses for e-money tokens:** The custody or transfer of e-money tokens can trigger requirements under the Payment Services Directive, including PSD2, in addition to MiCA licensing. A clearer division of responsibilities, or a single-license route, could reduce duplicated compliance work and legal uncertainty while keeping supervisory coverage in place.
- **Stablecoin reserve rules:** Issuers are required to keep at least 30% of reserves as bank deposits. The source argues that a more flexible framework allowing other high-quality liquid assets could be considered, while still maintaining the ability to meet redemptions. It also notes that bank-deposit requirements may limit returns when interest rates are rising and concentrate exposure to banks during a banking crisis.
None of these proposals amounts to deregulation. They reflect an attempt to align obligations more closely with the risks posed by different business models and market participants. The objective is to preserve consumer and financial-system safeguards without allowing fixed compliance costs to become a barrier that favors only incumbents.
Moneyiar market picture
Moneyiar market data at 09:19 on October 1, 2026, show Ethereum at $2,688.9284107576, up 0.45% over 24 hours and 1.13% over seven days. Propy was priced at $0.3609865504, with a 10.25% 24-hour gain and a 1.49% seven-day gain, based on Moneyiar data at 14:44 on September 25, 2026. Ark stood at $0.2525989036, down 14.47% over 24 hours but up 46.86% over seven days, according to Moneyiar data at 09:18 on October 1, 2026.
Europe’s regulatory challenge is therefore one of calibration. MiCA has created a unified framework that can make the region more attractive than a collection of disconnected national regimes. The review will determine whether its obligations continue to support that single market or begin to make it too costly for the firms and competition needed to sustain it.
