The EU Regulation on the Regulation of Encrypted Assets Markets MiCA transition period will end on 1 July. Unauthorized encryption companies will then be unable to continue to provide related services to EU clients. As this node approached, some European entrepreneurs began to see the UAE, particularly Dubai, as a new landing point.
Growth in business advice in Europe
A Dubai lawyer, Irina Heaver, stated that her firm currently receives more than 120 consultations per week on the establishment of operations in the United Arab Emirates, about half of which come from Europe. Sources include Spain, Italy, Germany, and the United Kingdom and Switzerland, which are not covered by the MiCA.
She stated that this trend had taken place some 18 months ago, before the first MiCA rules came into force. As the stabilization currency rule moves ahead, and the transition period for encrypted asset service providers is nearing its end, businesses begin to reassess the costs, timing and uncertainty of continuing to operate in the EU.
MiCA cut-off date to change competition patterns
MiCA has a unified encryption regulatory framework for the EEA, covering the 27 EU countries as well as Iceland, Liechtenstein and Norway, with a total population of about 500 million. After 1 July, companies that rely on the old systems of member States will not be able to continue to provide services under the supervision of the MiCA.
This change has affected the competition for the platform. Cheon An withdrew his MiCA licence application in Greece last week and informed EU users that they would suspend some of their services while seeking other avenues of compliance. For CoinDesk, it is stated that it will continue to advance the European market layout and expects to obtain a MiCA license in the coming months.
After that, OKX and Coinbase announced an incentive of up to 8% of the total amount of deposits and transfers for new users, hoping to take over market flows.
Dubai emphasizes card speed and market coverage
Proponents believe that the UAE ' s attraction comes mainly from two points: from the fact that the regulatory system is dedicated to digital assets and from the fact that approval is faster. Heaver mentioned that the Dubai Virtual Assets Regulatory Authority (VARA) specializes in the encryption industry, while many European regulators also regulate banks and traditional financial institutions.
She indicated that it might take only a few days to establish a company in the United Arab Emirates and often months in Europe. For start-ups, this means that products can be online faster and that it is easier to extend business to Asia, North Africa and other emerging markets.
According to her, the potential market for the United Arab Emirates licence covers approximately 4 billion people, which is also an important reason for many teams to reconsider their headquarters locations.
Europe or facing brain drain and tax loss
According to Heaver, Europe may lose part of its employment, taxation and innovation opportunities if experienced entrepreneurs move teams, capital and intellectual property to the United Arab Emirates. She mentioned that it was not just a small team that came to consult, many of whom had started a business several times or had had an exit experience.
Market participants also have different judgments about the degree of pressure on MiCA. OKX European CEO Erald Ghoos said that probably 80% of encryption companies could not survive under the MiCA framework and were forced out of the EU market.
However, the proponents of MiCA have been of the view that the Uniform Rules would help to increase industry transparency and provide a clearer cross-border access environment for compliance operators. More directly, the regulatory deadline is forcing European encryption firms to re-choice license paths and regional layouts.