The EU has issued about 230 MiCA plates, which are under pressure from small encryption companies

The European Union has issued approximately 230 relevant licence plates within the framework of the Code of Regulation of the Encrypted Asset Market. With the new rules, the European encryption industry is entering a more explicit compliance phase, but the operational pressure on small and medium-sized institutions is also rising.

Germany, the Netherlands and France ahead of approval

Currently, Germany, the Netherlands and France are the most active markets for the approval of MiCA licences, with the most advanced sales. This means that the leading European encryption operations centre is taking the lead in completing the regulatory transition, and that licensing will gradually become the business norm.

The MiCA advance is shifting the threshold for the operation of encryption companies from past regionalization rules to a unified EU framework. For platforms that already have the capacity for compliance, control and capital, this has helped to expand the reach of operations and to enhance the stability of cross-border operations.

Withdrawal or shift of small institutions to cooperation

However, the new regulations are also accelerating the division of industries. Reports indicate that many smaller encryption companies do not apply for licences, while others choose to withdraw their applications, seek partners or prepare to close their operations.

This reflects the fact that MiCA is not just a licensing exercise, but is re-establishing a competitive pattern in the industry. For small institutions with limited resources, the cost of compliance, operational requirements and ongoing regulatory pressure may have exceeded their independent capacity.

Market concentration concerns

From a regulatory point of view, the MiCA is strengthening harmonization of regulation and market constraints in the encryption industry, which will help to increase transparency and compliance. But at the same time, the market is looking at the other side: If small players continue to decline, the diversity of the European encryption market may be affected.

Regulators and industry participants will continue to observe the actual effects of the expansion of the MiCA, with emphasis on changes in the licence structure, market concentration and the viability of small and medium-sized companies.