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Digital financial assets are among the most promising business areas. Plans to develop and implement a fundamentally new EU-wide legal framework regulating all commercial relationships in this market have existed for years. In fact, their transformation into specific laws has been delayed.
The relevant MiCA law, which regulates the digital financial asset sector, came as a surprise to many key players in the cryptocurrency market. It raised many unanswered questions. One of the most problematic areas concerns license issuance. The rules and requirements for companies seeking crypto licenses have become significantly stricter, leaving the European cryptocurrency market in a gray area of uncertainty.
Climbing a Downward Staircase?
The MiCA (Markets in Crypto-Assets) law came into effect on December 30, 2024. A key innovation is the shift from internal regulatory documents to EU-wide directives. What does this mean for the cryptocurrency business, both in Europe and globally? Based on currently available information, nothing good comes of it.
Stated Goals and Objectives of MiCA:
- Customer protection
- Transparency in the cryptocurrency market
- Standardization of all digital asset transactions
- A unified regulatory approach
- Simplified interaction between market participants and national regulators
- Costs reduction
- Increased investment appeal of EU jurisdictions
- Mandatory (not just formal) compliance with AML/CTF principles
- Control over the issuance and circulation of stablecoins
- Standardized requirements for cryptocurrency issuers (detailed white paper, approval from a competent national authority)
Key Changes in MiCA
One of the most significant changes is the abolition of VASP (Virtual Asset Service Provider) licenses. Previously issued permits will remain valid until the end of 2025. During this period, market operators must decide whether they want to continue working with cryptocurrencies. Those who choose to remain in the industry must obtain a CASP (Crypto-Asset Service Provider) license.
Consumers see little distinction between virtual and cryptocurrency assets, and even FATF considers them synonyms. But MiCA does not recognize them as identical, which could have major implications for businesses.
The classification of tokens under MiCA may raise questions, as the division, while formally logical, allows for alternative interpretations. The law classifies digital assets into three categories:
- Utility tokens – They provide access to goods or services from the issuer of a specific digital asset.
- Asset-referenced tokens – Cryptocurrencies with a stable price backed by commodities, fiat currencies, other tokens, or their combination.
- E-money tokens – Used for currency exchange and maintaining a stable value, with fiat currency as their underlying asset.
The CASP license grants permission for a standard set of crypto services. The list of options in comparison with VASP that used to work before MiCA acceptance hasn’t changed much. They both allow for storage and administration of digital assets, stock exchange activities, exchange operations in any direction within the token-fiat pair, consulting, and market placement.
Stricter compliance requirements for CASP license holders and stablecoin issuers could drive some companies out of the cryptocurrency market. Others may opt to operate in the gray zone, avoiding public disclosure. Some businesses might choose relocation to jurisdictions with more favorable regulations.
Basic CASP License Requirements:
- A registered office in any EU country
- Good reputation of key company personnel (beneficiaries, shareholders, executives)
- Compliance with digital asset storage regulations
- Minimum capital of €50,000–€150,000 (depending on services offered)
- Full AML/CTF compliance
Requirements for Stablecoin Issuers:
- Mandatory customer information disclosures
- Public disclosure of business model details
- Effective management systems, including risk management
- Transparent buy-back mechanisms
- Sufficient financial reserves
- Registration with the European Banking Authority (EBA)
The tightening of cryptocurrency market regulation in the European Union poses a significant challenge for companies. They will have to adapt to the new realities. In a few months, the licensing situation should become clearer, as regulators will release official comments, making it easier to understand how to conduct business.
But there is an alternative solution. MiCA is a European law that doesn’t apply outside the EU. Thus, companies seeking to operate without compliance burdens legally may consider alternative jurisdictions. The most promising options are El Salvador, Anjouan (Ndzwani), Canada, Georgia, and Argentina.
However, it’s also not a universal resolution of the issue, and it comes with the following challenges:
- Registering a new company (relocation mechanisms are limited)
- Opening a corporate account for a high-risk business
- Obtaining a new license
- Addressing administrative and legal complexities
- Navigating legal issues for servicing EU residents without an EU license
However, such difficulties cannot be considered insurmountable. These are technical issues that can and should be resolved with the help of the IT-OFFSHORE specialists. Notably, the cost of relocating a business to one of the alternative jurisdictions will be significantly lower than adapting to MiCA requirements.
Cryptocurrency Business in El Salvador
The jurisdiction’s economy is developing rapidly, and authorities focus on attracting foreign investment. The approach to cryptocurrency is highly progressive. Bitcoin is an official means of payment in the country, and part of the national reserves consists of BTC tokens. On January 30, 2025, the government of El Salvador introduced legislative amendments at the request of the IMF, but this did not affect the overall positive attitude toward crypto and related technologies.
BSP (Bitcoin Service Provider) license capabilities:
- Transaction processing
- BTC money transfers
- Custodial services
- Development of digital financial infrastructure
- Simplified integration into El Salvador’s cryptocurrency ecosystem
DASP (Digital Asset Service Provider) license capabilities:
- Legalization of cryptocurrency exchanges and platforms
- ICO/IDO projects
- Digital wallet services
Cryptocurrency Business in Anjouan
It is a small island in the Indian Ocean with a population of just under 300,000. Anjouan could become a key hub for the modern digital economy and blockchain-based financial services following the introduction of the European MiCA law. The business setup process is simplified, and the legal requirements are loyal.
Cryptocurrency license capabilities in Anjouan:
- Exchange operations
- Custodial services
- ICO / ITO
- Mining
- Retail contracts (CFD, Contract For Difference)
- Launch and operation of cryptocurrency exchanges
- Liquidity provision
Cryptocurrency Business in Canada
Canada is the most crypto-friendly country among the G7 nations. A key law regulating the status of cryptocurrencies was enacted in 2014, integrating digital financial assets into the legal framework and bringing crypto operations out of the underground economy.
License options:
- MSB (Money Services Business) – for companies with a physical presence in Canada.
- fMSB (foreign MSB) – for businesses without a physical presence in Canada but planning to offer services within the country
Cryptocurrency license capabilities in Canada:
- Trading and exchanging digital financial assets
- Cryptocurrency money transfers
- Settlement of remittances and similar financial instruments
- Registration of a cryptocurrency exchange
Cryptocurrency Business in Georgia
Georgia is one of the most crypto-friendly countries. The government actively supports the cryptocurrency sector with lenient regulations. While AML/CTF requirements apply, they are not as strict as in the European Union. Notably, the country offers a relatively low entry threshold and special industrial zones that simplify business operations.
License options:
- VASP (Virtual Asset Service Provider) – a universal license allowing key services such as crypto exchange, custody, and ICO operations.
- PUVA (Private Unitary Virtual Asset) – required for launching investment projects and managing virtual assets.
Cryptocurrency license capabilities in Georgia:
- Currency exchange (crypto and fiat in any direction)
- Money transfers
- Cryptocurrency administration and oversight services
- Investment portfolio management for crypto assets
- Trading platform administration
- Crypto lending services
- ICO
Cryptocurrency Business in Argentina
Argentina is the leading cryptocurrency market in Latin America. It offers highly favorable conditions for crypto companies. Obtaining a license is generally straightforward, with minimal regulatory hurdles. The country has a flexible legal framework, allowing businesses to register under various legal structures (SA, SRL, SCS, SAS, SCE). If all national regulatory requirements are met, the risk of rejection when opening a corporate account is relatively low.
Cryptocurrency license capabilities in Argentina:
- Exchange operations (between crypto assets and fiat currencies in any direction)
- Token swaps
- Cryptocurrency transfers
- Custody and/or management of virtual assets or any other financial instruments utilizing them
- Participation in commercial projects related to ICOs and/or cryptocurrency sales
- ICO, including stablecoins
The MiCA regulation aims to bring order to the developing European crypto market. Specialists expect to see enhanced security and transparency while reducing the potential for aggressive tax optimization and money laundering. However, stricter oversight will very likely force some crypto projects to relocate to more beneficial jurisdictions.
The final decision depends on the specifics of each project. That’s why consulting with IT-OFFSHORE specialists can provide a strong legal foundation for your cryptocurrency business. It will help you choose the best course of action in light of evolving digital assets regulations in the EU.
