MiCA 2.0: Nordic Law submits its response on the review of MiCA

The European Commission’s targeted consultation on the review of MiCA (Regulation (EU) 2023/1114) closed on 30 September 2026. Nordic Law submitted a response of its own and also assisted several of its clients in the crypto-asset sector with their responses.

In our own response, we focused on the questions we consider the most important for the market as a whole and addressed the following issues:

1. Micro-CASP: a workable route to market must be created for small CASPs.
2. Level 2 and 3 regulation must be reduced to provide more legal certainty.
3. Stablecoin regulation needs to evolve with the market.
4. Blockchain-based prediction markets should be brought under MiCA.

In this article, we present our response in more detail.

What was the consultation about?

MiCA has applied in full since 30 December 2024. The purpose of the consultation is to help the Commission assess whether MiCA remains fit for purpose in light of initial practical experience with its application and developments in the market.

The responses will feed into two reports required under MiCA: under Article 140, the Commission must present a report to the European Parliament and the Council on the application of the Regulation, while Article 142 requires the Commission to report on the latest developments in crypto-assets, in particular on matters not addressed in the Regulation.

Either report may, where appropriate, be accompanied by a legislative proposal, and the possible reform has already come to be referred to in the crypto-asset market as MiCA 2.0.

To support EU competitiveness, the Commission also aims to assess whether the administrative burden arising from MiCA can be reduced. The consultation asked, for example, whether the rules for crypto-asset service providers (CASPs) are proportionate to a provider’s size, scope of activity and risk profile.

Key points of Nordic Law’s response

1.      Micro-CASP tier – a realistic route to market for small players too

The requirements of MiCA and the Commission’s delegated regulations, and the way they are applied in practice, mean that an applicant for CASP authorization is in practice expected to meet all requirements already at the authorization stage, regardless of its size or risk profile. This may mean, for example, that staff must be recruited and the service fully built at system level, in its final form, before the application is even submitted. At the same time, the authorization process itself can take several months, so the costs of recruitment and investment may become unreasonable for a new entrant without an existing business to lean on, for example outside the EU.

First, we proposed conditional authorization. At the application stage, the applicant could present its key staff, a realistic recruitment plan for completing its organization and its plans for its technical systems, and authorization would be granted subject to the condition that these plans are met before any services are provided to clients.

Second, we proposed a lighter tier for small CASPs, as MiCA does not sufficiently take account of firms of different sizes. Significant CASPs face additional requirements, but there is no lighter route for small ones.

By contrast, the Payment Services Directive (PSD2), the Electronic Money Directive (EMD2) and the Alternative Investment Fund Managers Directive (AIFMD), for example, all make room for smaller providers, and similar provisions should be included in MiCA going forward. This would improve small firms’ ability to enter the market.

The tier we proposed would apply only to firms that do not operate a trading platform, hold client assets only up to a cap and stay below other predefined thresholds. The relief would concern organizational requirements only, while requirements relating to, for example, client protection, custody, AML/CFT and capital would stay unchanged.

A micro-CASP would keep the passport, meaning that it could provide its services across the EU under a single authorization, and it would move to the full regime only once its activities had grown sufficiently large.

2.      Less level 2 and 3 regulation, more legal certainty

The rules for the crypto-asset sector are currently spread across several levels, with MiCA being supplemented by multiple technical standards, guidelines, Q&As and supervisory briefings. With the rules scattered across so many sources, the applicable law becomes harder to interpret.

The large volume of level 2 and 3 regulation also blurs the hierarchy of legal sources, which undermines legal certainty in the authorization process. Level 3 measures are soft law, yet in practice they are applied as binding law. To safeguard legal certainty, applicants should be able to challenge decisions taken by the authority in the authorization process, particularly where those decisions are based on level 3 measures.

We therefore recommended reducing level 2 and 3 regulation to make the applicable law clearer and more predictable for everyone in the crypto-asset sector.

3.      Stablecoin regulation needs to evolve with the market

The largest stablecoins on the market are currently dollar-denominated and predominantly issued outside the EU. A CASP may offer them in the EU only if their issuer complies with the requirements of MiCA.

However, many issuers of e-money tokens have stayed out of the EU altogether because of the requirements imposed on them. One example is Tether and the world’s largest stablecoin, USDT, which it issues. According to Tether’s own statement, it deliberately chose not to apply for authorization in the EU because of MiCA’s reserve requirements.

According to Circle, only three of the world’s 25 largest stablecoins are issued by MiCA-authorized issuers. In practice, EU users have limited access to the major stablecoins, as CASPs are prohibited from offering them to their clients. Regulation should be developed so that EU users have fair access to global stablecoins.

Nor should EUR stablecoins be more restricted than stablecoins in other currencies. The inconsistency currently arises because a euro-denominated e-money token is always deemed to be offered in the EU, even if it is in fact intended only for markets outside the EU, whereas MiCA applies to a dollar-denominated stablecoin only once it is offered in the EU.

Likewise, asset-referenced tokens (ARTs) should not be regulated so heavily that no market can emerge at all. The Commission itself notes in the consultation document that not a single ART has been authorized in the EU in nearly two years. This can reasonably be attributed to regulatory design rather than to a lack of demand.

4.      Blockchain-based prediction markets should be brought under MiCA

One of the questions the Commission asked in the consultation was whether blockchain-based prediction markets should be regulated under the Markets in Financial Instruments Directive (MiFID II) or under MiCA. The EU currently lacks clear rules for blockchain-based prediction markets. As a result, depending on how their contracts are structured, service providers can today fall under different regimes, even where the activity itself is the same.

There is clear demand for prediction markets in the EU, but in the absence of lawful supply, EU consumers use platforms outside the EU. This exposes them to greater risks and keeps the business and its revenue outside the EU.

We proposed that MiCA become the single regime for blockchain-based prediction markets and that prediction markets be added to it as a dedicated crypto-asset service. Where demand exists, the activity should be allowed so that its benefits remain within the EU. At the same time, the activity should be subject to strict conditions to protect consumers, covering, among other things, market structure, collateral and eligible events.

What happens next?

The Commission will prepare a summary of the consultation responses. Under Article 140 of MiCA, the Commission must submit a report on the application of the Regulation to the European Parliament and the Council by 30 June 2027, accompanied where appropriate by a legislative proposal. We will follow closely where the Commission takes the review.

Our Junior Trainee Pyry Rajala took part in writing this article.