TLDR

  • Six EU member states including Belgium, Italy, and Poland are not ready to implement MiCA crypto regulations by the December 31st deadline

  • Trade associations are requesting a 6-month “no-action” period to avoid disrupting services

  • The implementation delay stems from insufficient time between October’s technical standards finalization and the December deadline

  • Some crypto firms may need to halt European operations if they can’t obtain licenses in time

  • National regulators cite legislative processes and government coordination as main bottlenecks

With just three weeks remaining until the European Union’s Markets in Crypto Assets (MiCA) regulation takes effect, six EU member states have yet to align their local laws with the new framework. Belgium, Italy, Poland, Portugal, Luxembourg, and Romania are among the countries still working to implement the necessary changes, according to documentation from the Electronic Money Association.

The implementation of MiCA follows a two-phase approach. The first phase, completed in June, focused on stablecoin issuers and their operating authorizations. The December deadline marks the second phase, which affects crypto asset service providers (CASPs) such as exchanges, wallet providers, and custodians.

Under the new regulations, these firms must register and establish a base in at least one EU country to obtain a license for operating across the trading bloc. However, the short timeline between October’s finalization of regulatory technical standards and the December deadline has created challenges for national regulators.

Several crypto industry trade bodies, including Blockchain for Europe and the European Crypto Initiative, have expressed concerns about the tight implementation schedule. In a letter to the European Securities and Markets Authority (ESMA), they highlighted the difficulties national competent authorities face in properly managing CASP applications within the current timeframe.

The trade associations have requested a six-month “no-action” period to prevent sanctions against firms that continue operating while awaiting authorization. While ESMA has initially denied this request, the deadline will be discussed at a December 11 meeting, with possible guidance on timing expected to follow.

Robert Kopitsch, co-founder of Blockchain for Europe, warns that some firms might have to cease their crypto operations without alternatives to the registration backlog. This situation could particularly impact services in Ireland, Portugal, Poland, and Spain, according to industry experts.

Even Germany, despite its advanced crypto asset regulation framework, faces challenges. The country needs new legislation to align its existing framework with MiCA specifications, a process that requires time and political coordination.

National regulators have identified legislative procedures as the primary bottleneck in implementation. In Poland, the Financial Supervision Authority (KNF) points to the Ministry of Finance as the coordinator responsible for meeting deadlines. The draft of Poland’s crypto-asset market act has received positive opinions but remains in committee review.

Portugal’s situation mirrors this legislative delay. The Portuguese Securities Market Commission notes that the implementation responsibilities and power allocation between regulatory bodies remain under government consideration.

Belgium’s FSMA indicates that political decisions regarding competent authorities for MiCA are still pending, preventing further progress. Meanwhile, Ireland’s Central Bank has begun engaging with potential applicants through a pre-application process, emphasizing the importance of preparedness in efficient authorization.

The implementation challenges extend beyond the named countries. Industry sources mention Italy, Malta, Cyprus, Lithuania, and Belgium as additional nations experiencing difficulties with the deadline. Malta’s existing crypto regime requires alignment with MiCA, creating another layer of complexity.

Helmut Bauer, a consultant with the Electronic Money Association, explains that the political and legislative processes have caused delays even in countries with established crypto frameworks. Germany’s BaFIN, for example, must await new legislation despite being operationally prepared.

The timeline pressure stems from the two-month gap between the October finalization of certain regulatory technical standards and the December implementation deadline. This short window has complicated the necessary paperwork and regulatory processes.

For crypto firms, the consequences of these delays could be substantial. Without proper authorization, companies may need to suspend their European operations, potentially disrupting services for users across the affected countries.

ESMA’s upcoming December 11 meeting may provide clarity on how regulators will handle the implementation challenges. While a complete enforcement stay appears unlikely, the authority may offer guidance on timing to help manage the transition period.

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