MiCA Fails to Unify EU Crypto Regulation Despite 17 Regimes

Benedikt Faupel, head of public affairs at Austrian crypto exchange Bitpanda, has highlighted that Europe’s flagship crypto regulation, the Markets in Crypto-Assets Regulation (MiCA), still allows for uneven implementation across the European Union. This fragmentation is evident despite MiCA's aim to provide regulatory clarity and harmonization across the bloc.

Faupel noted that before MiCA, the European crypto landscape was fragmented by as many as 17 separate licensing regimes. MiCA was intended to simplify this by providing a unified regulatory framework. However, Faupel expressed concerns that the harmonization is not up to standard, with different jurisdictions still showing substantial differences in their approaches to implementing MiCA.

Faupel cited examples of local regulators taking different approaches to licensing, with some conducting in-depth institutional examinations while others only examine deeper when necessary. This creates an imbalance, which Faupel attributes to the novelty of regulating crypto assets rather than an inherent flaw in MiCA. He suggested that the regulatory gap between MiCA-adhering countries should be closed to create a level playing field across the EU.

Faupel also mentioned that MiCA is a “good legislative act to a great degree,” but further iterative modifications could improve the reporting requirements. He explained that local regulatory bodies often request all the data they can obtain and only then consider what this data can be used for. Bitpanda’s public affairs team, led by Faupel, is focused on educating politicians and supervisors in the EU and is in regular contact with lawmakers in the European Parliament and with national regulators where it operates.

Faupel emphasized the need for the crypto market to mature and for Europe to drive this forward. He believes that the market in Europe has matured quite well and that this is something that needs to be continued. These comments come as Germany’s largest bank, Deutsche Bank, reportedly plans to allow its clients to store cryptocurrencies such as Bitcoin from next year in partnership with Bitpanda.