Encrypted regulation in Europe or a wave of mergers and acquisitions: SMEs seeking integration with banks and traditional financial institutions

On 26 July, the European encryption industry is entering a new phase of integration as the European Union Encrypted Assets Market Regulation Act (MiCA) moves on the ground and the British encryption regulatory framework is about to take shape. Industry believes that high-standard regulatory requirements may facilitate a new wave of mergers and acquisitions and that cooperation between encrypted start-ups and traditional financial institutions will be further deepened. The MICA licensing phase is coming to an end, but the real challenges facing businesses are just beginning. The high cost of continuing to operate a compliance system could change the European encryption industry. The focus of future industry competition may shift from “who gets a license” to “who has the capacity to bear the regulatory costs” and to promote the scaling up of enterprises through mergers and acquisitions, joint ventures or cooperation with banks. It is widely recognized that the European encryption industry is entering a “regulatoryly driven integration cycle”. For encrypted start-ups that in the past relied on rapid innovation and light asset models, future core competitiveness may no longer be just technology speed, but rather compliance, capital size and financial infrastructure integration。