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The European Union has introduced one of the first comprehensive cross-border regulatory frameworks for crypto-assets. With the Markets in Crypto-Assets Regulation, known as MiCAR, crypto-asset services falling within MiCAR’s scope in the EU are now subject to a harmonised regulatory framework covering authorisation, transparency, governance, market integrity and user protection.
For anyone active in European crypto-asset markets, understanding MiCAR is important. This article explains what crypto regulation is, how MiCAR works, what types of crypto-assets it covers, and why it matters for users and the wider industry.
Key takeaways
MiCAR establishes a harmonised regulatory framework for crypto-assets and crypto-asset service providers across the EU.
The regulation introduces clearer rules on authorisation, governance, disclosures, conduct and supervision.
MiCAR is an important step toward greater transparency and user protection in the EU crypto-asset sector, while global regulatory fragmentation and technological innovation remain ongoing challenges.
Crypto regulations are the legal and procedural rules that apply to the creation, issuance, offering, exchange, transfer, custody and use of crypto-assets. Different jurisdictions have taken different approaches. Some have introduced dedicated frameworks for digital assets, others apply existing financial laws, and some restrict or prohibit certain crypto-related activities.
Although approaches differ, the main policy objectives are generally similar: protecting users, supporting market integrity, reducing risks of financial crime and creating clearer rules for businesses operating in the sector.
As crypto-assets have developed from a niche technology into a more widely used financial category, the need for clear and consistent regulation has increased. The EU’s approach through MiCAR is intended to reduce fragmentation by creating a single regulatory framework across EU Member States.
MiCAR is the EU’s legal framework for crypto-assets and crypto-asset service providers. It was formally adopted in 2023. Certain stablecoin-related provisions became applicable from 30 June 2024, while the wider framework for crypto-asset service providers became applicable from 30 December 2024.
MiCAR was designed around three main objectives:
strengthening user protection and market transparency;
supporting financial stability; and
enabling responsible digital finance innovation in the EU.
To achieve this, MiCAR sets out rules for crypto-asset issuers and crypto-asset service providers operating within its scope. These rules cover areas such as disclosures, authorisation, governance, conduct, complaints handling, custody arrangements and ongoing supervision.
Before MiCAR, crypto-asset businesses operating across several EU Member States often faced different national rules, or in some cases limited dedicated regulation. MiCAR creates a more harmonised framework for authorised crypto-asset service providers across the EU.
MiCAR classifies crypto-assets into three main categories:
Category | Description |
E-money tokens, or EMTs | Crypto-assets that aim to maintain a stable value by referencing one official currency |
Asset-referenced tokens, or ARTs | Crypto-assets that aim to maintain a stable value by referencing another value or right, or a combination of values or rights, including one or more official currencies |
Other crypto-assets | Crypto-assets that are not EMTs or ARTs and are not otherwise excluded from MiCAR’s scope, including certain utility tokens |
This classification matters because different categories are subject to different requirements. MiCAR does not treat all crypto-assets in the same way. For example, EMTs and ARTs are subject to specific issuer-related requirements because of the particular risks associated with stable-value tokens.
MiCAR also does not replace all other financial services laws. Where a crypto-asset qualifies as a financial instrument or falls under another existing EU financial services regime, other rules may apply instead. Some crypto-assets or related activities may be outside MiCAR’s scope or subject to other EU or national regulatory regimes.
MiCAR is the centrepiece of the EU’s crypto-asset regulatory framework, but it operates alongside other EU measures that address related areas such as anti-money laundering, operational resilience and tax reporting.
The EU Transfer of Funds Regulation extends travel rule requirements to certain crypto-asset transfers. This means that required information about the originator and beneficiary must accompany relevant transfers. The objective is to support anti-money laundering and counter-terrorist financing controls.
The Digital Operational Resilience Act, known as DORA, has been applicable since 17 January 2025 and sets operational resilience requirements. and sets operational resilience requirements for a range of financial entities, including certain crypto-asset service providers. It covers areas such as ICT risk management, incident reporting, third-party technology risk and business continuity.
DAC8 became applicable on 1 January 2026 and introduces tax transparency and reporting obligations related to crypto-assets in the EU. It is part of the EU’s wider tax transparency framework. National tax treatment of crypto-assets may still differ between Member States, so users should seek independent professional advice for questions about their individual tax position.
The EU is also exploring the concept of a digital euro. A digital euro would be a central bank digital currency and would be separate from decentralised crypto-assets. This remains a developing policy area.
Bybit EU GmbH has obtained authorisation in Austria as a crypto-asset service provider under MiCAR. This authorisation allows Bybit EU to provide the crypto-asset services covered by its authorisation in EEA jurisdictions where applicable passporting requirements have been satisfied and where the relevant services are made available. Bybit EU services are currently not available to residents of Malta.
Bybit EU’s authorised MiCAR services include custody and administration of crypto-assets on behalf of clients, exchange of crypto-assets for funds, exchange of crypto-assets for other crypto-assets, placing of crypto-assets and transfer services for crypto-assets on behalf of clients.
Bybit EU’s European headquarters are located in Vienna. As an authorised crypto-asset service provider, Bybit EU is subject to applicable MiCAR requirements, including governance, conduct, transparency, complaints handling and supervisory obligations.
For eligible users in EEA jurisdictions where Bybit EU services are available, Bybit EU’s authorised status means that relevant crypto-asset services are provided within the scope of a regulated MiCAR framework and subject to applicable supervisory requirements.
Regulatory authorisation should not be understood as a guarantee of performance, safety, uninterrupted service, asset value or protection against losses. Crypto-assets remain risky, may be highly volatile and may result in partial or total loss of capital.
MiCAR is an important step for the EU, but crypto regulation still faces several challenges at both regional and global level.
Crypto-assets do not always fit neatly into traditional legal categories. Depending on their structure and function, they may raise questions under financial services, payments, securities, commodities, consumer protection, tax or anti-money laundering laws.
MiCAR reduces uncertainty in the EU by creating specific categories for crypto-assets and a dedicated authorisation regime for crypto-asset service providers. However, the global regulatory landscape remains fragmented, with jurisdictions taking different approaches.
Crypto-asset markets involve risks, including volatility, technology risk, fraud, scams, operational failures and the potential loss of capital. MiCAR addresses some of these risks by imposing obligations on authorised crypto-asset service providers and certain crypto-asset issuers.
These obligations include requirements relating to disclosures, conduct, complaints handling, custody and governance. However, regulation cannot remove all risks, and users should always understand the risks before engaging with crypto-assets.
Crypto-assets can be misused for financial crime, including money laundering and terrorist financing. In the EU, anti-money laundering and counter-terrorist financing obligations operate alongside MiCAR, including under the EU AML/CFT framework and the Transfer of Funds Regulation.
These rules support customer due diligence, transaction monitoring and the availability of originator and beneficiary information for relevant crypto-asset transfers.
Crypto-asset transactions can involve users, platforms and infrastructure across multiple jurisdictions. This creates challenges where different countries apply different rules or supervisory approaches.
MiCAR creates a harmonised framework within the EU, but international coordination remains important. Without consistent global standards, regulatory arbitrage and uneven levels of user protection may continue.
Blockchain technology evolves quickly. Areas such as decentralised finance, new stablecoin models, tokenisation and emerging infrastructure can develop faster than regulatory frameworks. Regulators therefore need to continue monitoring market developments and updating rules where necessary.
MiCAR changes the EU crypto-asset sector by introducing a more harmonised and enforceable framework.
MiCAR allows authorised crypto-asset service providers to use a single EU authorisation framework to provide relevant services across the EEA, subject to the scope of their authorisation, applicable passporting requirements and actual service availability. This reduces the need to navigate separate national regimes for the same activities.
MiCAR introduces legal obligations for authorised crypto-asset service providers. These include requirements relating to transparency, conduct, complaints handling, custody and governance. Users of authorised providers can expect a more structured regulatory environment than existed before MiCAR.
MiCAR includes rules addressing market abuse in crypto-asset markets, including unlawful disclosure of inside information, insider dealing and market manipulation. These rules are intended to support fairer and more transparent markets.
A harmonised regulatory framework may make the EU crypto-asset sector more accessible to institutions that previously viewed regulatory uncertainty as a barrier. MiCAR does not remove all risks, but it provides greater legal clarity around authorised crypto-asset services in the EU.
MiCAR is one of the most comprehensive crypto-asset frameworks introduced by a major economic bloc. Other jurisdictions may look to elements of the EU approach when developing or updating their own crypto-asset rules.
MiCAR provides a harmonised regulatory foundation for crypto-assets and crypto-asset service providers in the EU. It introduces clearer rules for authorisation, governance, transparency, disclosures, conduct and supervision.
Challenges remain. Crypto-asset markets are still volatile, global regulation remains fragmented, national tax rules differ, and technological innovation continues to move quickly. MiCAR does not eliminate the risks associated with crypto-assets, and regulatory authorisation should not be understood as a guarantee of performance, safety or protection against losses.
Bybit EU provides crypto-asset services within its authorised MiCAR scope and operates subject to applicable regulatory and supervisory requirements.
No. MiCAR does not generally ban stablecoins. Instead, it introduces specific rules for issuers of asset-referenced tokens and e-money tokens. These rules include requirements relating to authorisation, reserves, governance, disclosures and supervision.
Certain tokens may face restrictions if they cannot meet applicable regulatory requirements.
MiCAR introduces stronger regulatory requirements for authorised crypto-asset service providers in the EU. These include obligations relating to disclosures, conduct, complaints handling, custody, governance and supervision.
This is intended to improve transparency and user protection. However, crypto-assets remain risky and users may lose some or all of their invested capital.
Crypto-asset service providers operating under MiCAR must obtain authorisation from a competent authority in an EU Member State. Authorised providers may then provide relevant services across the EEA through the MiCAR passporting framework, subject to the scope of their authorisation and actual service availability.
Users should verify whether a provider is authorised and should check which specific crypto-asset services the provider is authorised to offer.
Crypto-asset service providers that are required to be authorised under MiCAR but do not obtain authorisation may face restrictions, enforcement action or be required to stop providing relevant services in the EU.
Where applicable transitional rules are available, certain existing providers that provided services in accordance with national law before MiCAR became applicable may continue for a limited period, or until authorisation is granted or refused, whichever occurs first. Transitional regimes may differ between Member States.
Investing in crypto‑assets is associated with risks, including high volatility and the potential loss of capital. Inform yourself thoroughly about the risks before making an investment decision. The information provided in this article is strictly for educational and informational purposes and should not be construed as financial or investment advice.