Germany Leads Europe in Crypto Regulation with 36% of MiCA Licenses

Germany has taken the lead in Europe's crypto regulatory landscape, securing 36% of all licenses issued under the Markets in Crypto-Assets (MiCA) framework. This regulatory framework, which came into force earlier this year, aims to harmonize crypto regulation across the European Union by introducing a single licensing regime for all member states. Firms that obtain approval in one country can now offer services across the entire European Economic Area (EEA) without seeking additional permissions.

Trade Republic, one of Europe's leading fintech platforms, recently received a full MiCA license from BaFin, Germany's financial regulator. This license allows Trade Republic to offer crypto custody services, facilitate transfers, and execute or transmit client orders across all 30 EEA countries. Trade Republic manages over €100 billion in client assets and serves over four million customers across 17 markets, with 2.5 million based in Germany.

Circle executive Patrick Hansen noted that the license enables Trade Republic to internalize most of its crypto operations. The only exceptions are trade execution, which still requires partnerships with external market makers like Bankhaus Scheich and B2C2. "Trade Republic can now operate almost its entire crypto offering in-house across all 30 EEA states—only relying on external market makers (or trading platforms) like Bankhaus Scheich and B2C2 for trade execution," Hansen said.

This regulatory shift marks a significant change from the previous fragmented environment, where firms had to navigate multiple national regimes. As a result, major crypto platforms such as Coinbase, Crypto.com, Kraken, and OKX have moved to align with the new requirements. However, the adoption rate has been slower than expected. Within the first 100 days of implementation, only 15 Crypto-Asset Service Providers (CASPs) registered under the framework. According to Hansen, that number has since increased to 25 as of May 17, with most of these MiCA licenses granted in Germany.

Hansen emphasized that a MiCA license is now essential for any crypto firm seeking to operate across the EEA. This requirement has sparked a competitive rush among neobanks, brokers, and traditional financial institutions, all racing to secure their licenses before transition periods end. "The race is on: neobanks, brokers, other fintechs and even traditional banks are all moving quickly to secure their MiCA licenses before transition periods end," Hansen said.

Germany's leadership in the MiCA licensing process underscores its commitment to fostering a robust and regulated crypto ecosystem. The country's proactive approach to crypto regulation is likely to attract more crypto firms, further cementing its position as a hub for digital asset innovation in Europe. As the MiCA framework continues to evolve, it will be crucial for firms to stay compliant and adapt to the changing regulatory landscape to maintain their competitive edge.