Business Implications and Theoretical Integration of the Markets in Crypto-Assets (MiCA) Regulation

Abstract

The Markets in Crypto-Assets Regulation (MiCA) is a comprehensive European Union regulatory framework aimed at harmonizing the crypto-asset market. The existing literature has mainly examined MiCA from a legal perspective, while empirical assessments of industry perspectives remain scarce. In this study, we examine MiCA’s impact on the crypto market and its implications for both theory and practice by analyzing and integrating insights from 12 expert interviews. The findings reveal perceived benefits arising from the unified market, enhanced investor protection, and compliance clarity, alongside challenges related to the high regulatory burden, legal ambiguities, and limited innovation support. On this basis, we provide recommendations for improving the regulatory framework and its implementation. Furthermore, we integrate our findings within the technology–organization–environment (TOE) framework to provide a theory-based starting point for rigorous academic research. These findings contribute to regulatory discourse and offer practical guidance for the relevant stakeholders, including businesses, regulators, policymakers, and academics.

1. Introduction

The European Union’s Markets in Crypto-Assets (MiCA) regulation is the first comprehensive regulatory framework that aims to encourage innovation in digital finance with a focus on crypto-assets, as well as improve investor safety and financial stability [1]. MiCA was adopted in June 2023, with the initial set of rules pertaining to asset-referenced tokens and e-money tokens going into force on 30 June 2024, and full regulation beginning on 30 December 2024. The regulation includes a substantial number of Level 2 measures (i.e., legally binding rules to specify technical standards, methodologies, and procedures for uniform application across Member States) and Level 3 measures (i.e., nonbinding guidelines and recommendations designed to ensure consistent interpretation and supervisory practices across jurisdictions).

MiCA seeks to boost innovation while preserving financial stability and protecting investors from risks [2]. It establishes uniform rules for issuers of crypto-assets that have so far not been regulated by other European Union (EU) financial services acts and for providers of services related to crypto-assets (i.e., crypto-asset service providers (CASPs)).

For many years, crypto markets have operated as fragmented and self-regulated environments, without a comprehensive legal framework to provide clarity and promote consistency [3,4]. This lack of regulation has allowed for risky business practices and their serious consequences to taint perceptions of the crypto business environment, impeding the attainment of the requisite scale and stability for successful initiatives [5]. In recent years, several high-profile crypto projects have collapsed, illustrating the need for improved regulatory supervision and transparency [6]. MiCA’s regulation is a step toward resolving ongoing legal problems in the crypto industry [2]. It starts a new era of regulation for the industry, with the objective of ensuring investor protection and stability.

Despite MiCA’s efforts to establish a unified framework, it is yet to be determined whether the regulation will effectively harmonize the market and prevent misconduct or if it will exacerbate an already intricate legal landscape, thereby driving innovation outside of Europe [7]. At present, the industry is anticipating a precise regulatory framework that promotes growth while simultaneously protecting against abuse. Market misconduct, notably in the form of front running (i.e., gaining an advantage through insider knowledge), has been a persistent concern in the crypto industry. Additionally, the current information asymmetry, which includes regulators possessing a greater amount of information than the companies they supervise, is a problem that needs to be rectified to establish a more equitable regulatory environment [8].

MiCA’s envisioned goal is to harmonize the regulatory landscape for crypto-assets across the EU, and it addresses existing gaps and inconsistencies that have hindered the growth of the digital finance sector. However, as a complex and comprehensive regulation, it is not without its shortcomings and challenges [9]. Notably, a theoretical integration is missing, which makes it difficult to make predictions about the consequences for important stakeholders, and the extant literature has not yet addressed this empirically. By conducting interviews with experts in the field, this study bridges this gap, informs policy refinement, and fosters theoretical integration. Specifically, we investigate MiCA’s business implications and answer the following research questions:

• What are the key benefits and challenges of MiCA?
• How can the content and the implementation of MiCA be improved?
• How can MiCA be integrated into the technology–organization–environment (TOE) framework?

2. Related Literature and Existing Legislation

Several studies have already been conducted on the adoption of crypto-assets and the critical role of effective regulation in industry development [10]. However, prior studies have mainly focused on legal analyses and lack empirical validation through industry perspectives. MiCA aligns with financial regulatory theories that focus on market efficiency, investor protection, and systemic risk mitigation [11]. These perspectives help to conceptualize MiCA within broader regulatory frameworks, highlighting its role in shaping crypto-asset governance [12]. The need for introducing comprehensive regulations was underscored by global projects such as Diem (a blockchain-based stablecoin project initiated by Meta), the substantial risks identified by European supervisory authorities, and findings from European Commission studies [13]. Although MiCA aims to create a consistent regulatory framework and builds on existing legislation, such as Markets in Financial Instruments Directive II (MiFID II), Markets in Financial Instruments Regulation (MiFIR), Fifth Anti-Money Laundering Directive (AMLD5), Second Electronic Money Directive (EMD2), and Second Payment Services Directive (PSD2) (see Appendix A), the question remains as to whether it can provide the legal certainty required to foster greater adoption of crypto-assets, promote innovation, and achieve market stability [14,15].

According to the European Securities and Markets Authority (ESMA), the crypto-assets sector is still relatively small, but there are concerns about market integrity, including fraud, cyber-attacks, money laundering, and market manipulation [4], and the risks posed to investors. In this respect, the Second Global Cryptoasset Regulatory Landscape Study 2024 pointed out that MiCA is a response to concerns around the risks of global stablecoins (i.e., tokens having a value that is tied to an asset or an underlying basket of assets [16]) and their impact on monetary sovereignty [17].

Studies have detailed MiCA’s provisions, including stringent transparency requirements for stablecoin issuers, mandatory liquidity reserves, and enhanced consumer protection measures. For CASPs, MiCA establishes operational guidelines encompassing custody, trading, and issuance services [18]. These measures align with the broader EU objectives of financial stability and technological competitiveness. MiCA’s approach to stablecoins also includes rules ensuring that issuers maintain adequate liquidity and disclose critical information. By addressing these issues, MiCA aims to pre-empt crises arising from the potential failure of widely used stablecoins. The literature supports the view that such measures will strengthen market resilience and enhance investor confidence in crypto-assets [19]. The Bank for International Settlement highlights the regulation’s focus on creating a supportive environment for technological advancements while safeguarding against financial risks [20]. By setting clear rules, MiCA aims to foster sustainable growth in the crypto-assets sector [7].

Despite the broad recognition of MiCA’s potential benefits, industry stakeholders have expressed concerns regarding its implementation [21]. For example, the regulation’s strict requirements could impose significant compliance burdens on CASPs [22]. Studies have also shown that detailed reporting obligations, stringent risk management protocols, and adherence to standards pertaining to anti-money laundering (AML) and counter-terrorism financing (CTF) may prove challenging for resource-constrained entities such as small businesses. Further critique arises from the perceived gaps in MiCA’s scope: emerging trends such as decentralized finance (DeFi), nonfungible tokens (NFTs), and blockchain-based applications are not comprehensively addressed within the regulation [5]. To provide a structured overview, in this study, we unravel MiCA’s benefits and challenges and address existing shortcomings regarding its content and implementation.

3. Methodology

This study is based on semi-structured interviews with 12 key industry experts, including compliance leaders, legal advisors, and academics specializing in fintech and financial services regulation. The interviewees were selected based on their direct involvement in MiCA (i.e., knowledge about the legal implications of MICA and potential implementation hurdles), and they held roles as lawyers or compliance officers in crypto companies (4), law firms (5), and regulatory bodies (1), or as academic researchers (2). They were identified through online searches, direct outreach to existing contacts via LinkedIn or email, and recommendations provided by other participants. The sample size was determined by the level of theoretical saturation, with 12 interviews being a number that is typical for in-depth qualitative studies [23]. The interviews were conducted between June and November of 2024 and lasted from 30 to 60 min. The interview guide was pretested with two industry professionals to refine the questions’ clarity, relevance, and comprehensiveness. The interview guideline consisted of 3 sections (see Appendix B):

Section A. General information about the interviewees and the companies, such as the number of years spent dealing with crypto-assets, the services provided, the type of crypto-assets and type of services, and previous experiences with regulators.

Section B. Information specifically related to the MiCA regulation, including the familiarity of the interviewees with MiCA and how the new regulation will impact their companies’ services and products. Specifically, we discussed how MiCA will affect companies that act as CASPs. Finally, the experts were asked about the key benefits and challenges they foresee in implementing MiCA.

Section C. Respondents’ recommendations on improving the content of MiCA and the implementation process.

The interviews were conducted and recorded using the MS Teams platform. Each interview lasted between 30 and 60 min, with an average of 45 min. After transcribing the data, we had 120 pages of qualitative data, with an average of 10 pages per interview (double-spaced, 12-point font). The interviews were analyzed on a rolling basis and, after 12 interviews, data saturation was achieved.

We used Taguette, an open-source qualitative data analysis tool, to code and categorize the interview data using qualitative content analysis (QCA). QCA is a well-established method for systematically analyzing textual data, especially when the research goal is to identify patterns, themes, and meanings [24]. The coding process included three steps: (i) using open coding to develop a scheme aligned with MiCA’s provisions, (ii) iterative categorization and the identification of relationships (axial coding), and (iii) investigator triangulation to ensure coding reliability. To start, we created a categorization scheme with predefined categories directly derived from MiCA. These included the scope, requirements, governance and supervision, and enforcement. The sub-categories discussed in the following sections emerged inductively through the iterative coding process.

4. Results

The categorization process yielded the sub-dimensions of MiCA’s benefits and challenges as well as specific improvements for fine-tuning the regulation and improving its implementation. In the following sections, we summarize and describe these categories in detail.

4.1. Benefits of the MiCA Regulation

In general, the experts acknowledged the need to adopt a unified EU regulation for markets in crypto-assets to create trust and improve confidence in the market. They identified several benefits, both from an individual and an organizational perspective.

4.1.1. Legal Framework

One of MiCA’s most significant contributions is the creation of a unified legal framework for the crypto-assets industry. Before MiCA, many crypto companies operated in a regulatory grey area with little to no oversight. The experts pointed out several instances of misconduct and an unlevel playing field that existed before MiCA. For example, front running, in which service providers or entities execute trades ahead of customer orders to influence prices and gain unfair advantages, was a common malpractice. Additionally, the lack of regulatory clarity led to information asymmetry, market manipulation, and limited consumer protection, exposing investors to significant risks. These issues not only eroded trust but also stifled fair competition within the market, underscoring the need for a comprehensive legal framework. Before MiCA, there were some provisions in the AML directive that stated that CASPs needed to have a certain amount of capital. However, AML is only a directive, which implies that it needs to be transposed to each Member State, all of which have different requirements for registration and authorization. Consequently, the CASPs needed to comply with different national requirements. This resulted in a need for transparent solutions. For example, the stablecoin market faces significant concentration and compliance risks, with Tether (USDT) dominating 70% of the market, which means that its failure could significantly disrupt the whole crypto-assets market and create knock-on effects for the traditional financial system [25]. Many stablecoin issuers operate outside comprehensive regulatory frameworks, providing limited transparency on reserves and management practices, which increases the risk of fraud and instability. Consequently, companies have been operating in a self-regulatory mode because of a lack of regulatory frameworks, which has resulted in a fragmentation of the crypto industry [25]. In this respect, MiCA establishes common-sense rules to protect consumers. For example, the segregation of client funds and the prohibition of companies from trading on their own account are rules that have long existed for traditional financial players, and it is logical to apply them to crypto-assets as well.

4.1.2. Crypto Market Trust

Trust is critical for the growth of the crypto-assets industry, and MiCA aims to provide that by setting clear and predictable rules. The industry, long seen as speculative and prone to fraud, needed a regulatory framework to ensure market integrity. The experts especially noted that regulation is essential not only for the EU but globally, as it creates a foundation of trust for users and investors alike. The introduction of disclosure requirements promotes transparency, which is crucial for building confidence among both retail and institutional investors. As sustainability becomes a major focus for investors, Environmental, Social, and Governance (ESG) disclosures will help crypto companies demonstrate their commitment to responsible business practices.

4.1.3. Regulatory Guidance

A key benefit of MiCA is the regulatory guidance it provides. Crypto companies often struggle with regulatory uncertainty, which makes it difficult for them to plan long-term business strategies. MiCA allowed companies to consult with regulators, such as ESMA. During the consultation process, the provisions were communicated to the stakeholders, and feedback was requested on certain questions and terms [26]. For example, ESMA published a consultation paper to seek stakeholders’ views on draft guidelines on the conditions and criteria for qualifying crypto-assets as financial instruments. This resulted in 68 responses, which were posted on the website unless respondents requested otherwise. This guidance helps businesses navigate regulatory processes with greater confidence. The responsible authorities are also taking preparatory measures to provide clarity and support market participants. In particular, the Austrian Financial Market Authority published guidance regarding MiCA to help companies better understand the requirements and prepare for compliance [27]. For the industry to mature, it needs to be regulated and consumers need to be protected. It is important to have authorities responsible for the supervision of the market, which will also help investors because there will be fewer cases of fraud and fewer companies that offer services without authorization.

4.1.4. Passporting

A significant benefit of MiCA providing a unified framework for the crypto market and all its services is the concept of passporting. A license in one Member State allows firms to access the entire EU market. This is beneficial because, before MiCA, companies had to comply with different national regulations across the EU, which was burdensome. Now, the same standard is applicable throughout Europe. Having a splintered market across 27 Member States makes no sense for a technology that works without boundaries. MiCA regulates a single market and, if a company has a license in one of them, it can passport within the EU and gain access to 450 million EU citizens and residents. This not only reduces compliance costs but also allows businesses to focus on innovation and growth rather than regulatory navigation.

4.1.5. Harmonized System

MiCA creates a single harmonized system across the EU, which reduces the regulatory burden and benefits the industry. MiCA aims to establish a uniform regulatory framework for market players to adhere to the same standards. This is considered a positive step toward strengthening market integrity. To grow and to be trusted by private users and especially institutional investors, the industry needs to be regulated. This holds not only for the EU but also globally, since many investors are reluctant to participate in this market without regulatory clarity. MiCA is trying to set a level playing field throughout the entire EU, which should protect competition in general and help investors in particular by eliminating organizations that are not playing by the rules.

4.1.6. Market Abuse Regime

One of MiCA’s beneficial influences on the market is the provision specifically addressing the market abuse regime. For example, it covers issues such as front running, where service providers might execute their trades before the customer trades. Regardless of compliance challenges, the experts generally agree on the positive aspects of MiCA concerning investor protection and market integrity.

4.1.7. New Opportunities

MiCA opens new opportunities, such as new products and services, once the regulation is implemented. MiCA, along with other regulations on the tokenization of financial instruments, could drive significant changes, especially in traditional financial markets. It can be seen as an opportunity to clarify the fundamental concepts of financial market regulation and attract service providers and issuers to Europe. Consequently, it is the first blueprint that will lead to several other regulations being adopted as well. Once companies are ready to work under MiCA, they will be able to operate under any jurisdiction. In summary, the regulation can support market consolidation, lead to the disappearance of fraudulent products, bring in new players and mergers, and yield new segments, products, and services. Crypto will be more than a trading platform. Furthermore, it will encourage institutional clients to adopt crypto-assets by providing greater regulatory clarity and risk management frameworks, fostering confidence in the market. This, in turn, will open the crypto-assets market to institutional plans, such as pension funds, insurance companies, hedge funds, and endowments, enabling these large entities to integrate digital assets into their long-term investment strategies with greater security and compliance. Finally, new use cases will appear that will attract further interest in the market.

4.1.8. Investor Protection

Investor protection is the main focus of MiCA. Specifically, white paper disclosure requirements ensure that investors can access clear and comprehensive information before making investment decisions. In general, the EU puts a strong focus on investor protection, and companies that want to remain active in the market need to strengthen their conduct rules and provide their employees with the necessary data and skills to comply with stringent investor protection standards in the EU.

4.1.9. Environmental Accountability

MiCA includes provisions regarding the disclosure of adverse impacts on the climate and other environment-related negative impacts. This is an important step in requiring companies to collect and disclose data pertaining to their energy consumption, carbon emissions, renewable energy use, and governance transparency. This is a first step toward making the crypto industry accountable for its overall impact.

4.1.10. Innovation Support

Although innovation regularly comes from the businesses and the products and services they offer, regulation provides a legal framework that explicitly encourages the creation and use of crypto-related products and services. MiCA provides regulatory clarity, which facilitates companies’ expansion of operations within the EU. It fosters customer trust by enforcing safety, transparency, and accountability, facilitating adoption, and appealing to institutional investors. This framework facilitates the testing and the implementation of advanced technologies, converting them into significant, mainstream solutions while safeguarding consumers and market stability.

4.2. Challenges of the MiCA Regulation

The experts also identified several challenges related to the text and implementation of the MiCA regulation, which we categorized as follows.

4.2.1. Legal Clarity

One of MiCA’s biggest challenges is the lack of legal clarity since it overlaps with other regulations, and the borders between these regulations are not always clear. Additionally, there are regulatory frameworks, such as the Digital Operational Resilience Act (DORA), that were introduced around the same time as MiCA. This creates a heavy regulatory burden for companies. One example is the overlap between asset-referenced tokens (ARTs) and MiFID II instruments. In particular, it is unclear what happens if an ART is classified as a MiFID II instrument in one country but not in another. Moreover, there is a challenge regarding market abuse, especially in decentralized finance (DeFi) and blockchain-based markets. It is unclear how companies can handle these obligations, particularly regarding front running. Some provisions in MiCA closely resemble those in traditional financial markets, but the wording is slightly different, which can lead to confusion. The regulation was designed to fill gaps left by existing financial market regulations, but the definition of certain terms is vague. For example, derivatives are broadly defined in the MiFID II, and this is transferred over into crypto-assets under MiCA. One example of this would be a stablecoin that is backed by gold. Here, the question is whether it falls under MiCA or if it should be treated as a financial instrument. Consequently, companies need more guidance on which regulatory framework applies to their products. MiCA considers all crypto activities as financial services, which is not always true. For example, for industrial use cases, such as supply chain management, these regulations are too far-reaching and could drive innovation out of Europe. Additional concerns include the provisions regarding market abuse, since there is no certainty whether the regulations must apply in the same manner as established in traditional financial market law or if a different approach should be adopted. This makes it hard for service providers to meet their obligations. Additionally, conventional financial instruments traded in financial markets, including shares and derivatives, are defined with considerable ambiguity. For example, it is unclear how businesses providing services that are not regulated under existing frameworks (e.g., the 5th Anti-Money Laundering Directive) but are included in MiCA will be treated. Also, the distinction between the offeror and the issuer is now ambiguous, as well as the definition of a public offer, which varies among EU Member States.

4.2.2. Regulatory Scope

MiCA is not inherently crypto-centric and treats the entire cryptocurrency sector as a part of financial services. The experts indicate that the regulation should be regarded as targeting a novel digital infrastructure layer, with prospective uses in industrial sectors such as logistics. A critical concern is the absence of a definitive legal definition delineating what constitutes a financial instrument and its distinction from other asset categories. Significant challenges persist that complicate the interpretation, including the intersection between securities and tokenized financial products. Furthermore, MiCA lacks a third-country dimension. The rule mandates that any firm providing crypto services to EU citizens must be physically situated within the EU. Additionally, the exclusion of DeFi and the challenges posed by the right of withdrawal provision (i.e., the consumers’ right to cancel or withdraw from a contract or transaction within a specified period) show significant legal gaps. These challenges include regulatory blind spots and create an uneven playing field between centralized and decentralized platforms. This yields consumer protection risks as users of DeFi platforms lack the safeguards provided under MiCA. Additionally, the right of withdrawal, designed to protect consumers, leads to practical difficulties for crypto-assets that are not traded on platforms but through peer-to-peer transactions or for emerging market participants that are excluded from MiCA’s coverage. These gaps leave certain assets and actors unregulated, potentially fostering unfair competition, operational complexity, and reduced consumer protection.

4.2.3. Need for Interpretation

MiCA’s provisions overlap with other legal frameworks, such as MiFID II. Therefore, there is a need for interpretation of how these rules are applied, such as disclosure requirements, market abuse regulations, and licensing obligations. When the wording used is not identical, this raises the question of why it is different and whether these rules should be applied in a somewhat different manner. As such, further guidance has to be provided on how to fulfill the requirements, and market participants without thorough legal knowledge might find it hard to fully understand MiCA. For example, businesses face challenges in determining whether a crypto-asset falls under MiCA or MiFID II, particularly for assets like tokenized securities that share characteristics with traditional financial instruments. Companies offering both traditional financial services (regulated by MiFID II) and crypto-asset services (regulated by MiCA) must navigate dual regulatory frameworks, creating operational uncertainty and compliance risks. Therefore, companies need guidance on provisions, including how MiCA interacts with MiFID II and explanations of the rationale behind certain provisions.

4.2.4. Extensive Requirements

It will be hard for small companies to comply with MiCA’s extensive requirements, especially if they do not have legal knowledge and experience in financial markets. The compliance costs and operational requirements imposed by MiCA are a key challenge for companies, as are the stringent capital reserve requirements. MiCA requires stablecoin issuers to maintain adequate reserves, and it also introduces requirements for the safeguarding of assets, meaning that companies need robust risk management and custody solutions. Additionally, there are differences in the requirements under MiCA. For example, issuers of non-stablecoins do not need to be registered as compared to issuers of stablecoins, who must be registered as credit institutions or e-money institutions. Therefore, small entities may not be able to issue stablecoins at all. For service providers, the compliance burden is substantial. MiCA will likely improve transparency and help regulators gain a better understanding of the market. Market supervisors need to know what is happening in their jurisdictions, so reporting requirements are necessary. Again, smaller service providers may struggle to fulfill these requirements. The liability regime under MiCA is also strict. For example, management bodies of crypto-asset issuers and service providers (CASPs) are personally accountable for ensuring adherence to MiCA’s provisions. This includes the accuracy and completeness of white papers, safeguarding consumer funds, and implementing robust risk management and anti-money-laundering measures. Failure to meet these obligations may result in administrative sanctions, fines, or bans from holding managerial positions. Additionally, individuals involved in deceptive marketing, fraudulent schemes, or breaches of disclosure requirements could face legal consequences, including civil and criminal penalties. Companies need to have a certain size to be able to deal with all these requirements. Given that only a few will be able to afford the necessary infrastructure, the bigger ones are more likely to survive.

4.2.5. Innovation Barriers

MiCA claims to support innovation and be technology-neutral. In practice, the regulation is quite specific about the types of technology it affects. Innovation is regularly driven by the market, not regulation. In this respect, MiCA can help by providing a safe framework for new services, but it is up to the companies to drive innovation. Once innovation happens, there is a need for regulation, since customers and investors will want regulatory clarity. The experts also pointed out that innovation is not created by the exchanges but rather by the underlying blockchains, the decentralized applications, and the DeFi protocols. Even though this is where the innovation really happens, MiCA does not adequately cover that. To further boost innovation, there is a need for easy access to capital, which is mainly located in the US. Finally, MiCA requires that the reserves must be kept at a credit institution, which is counterintuitive if MiCA strives to foster innovative markets because it forces the market players to use the traditional banking system.

4.2.6. Lack of Enforcement

A new regulation without robust enforcement mechanisms risks failing to support market development and stability. EU regulations, especially when they apply across all Member States, need to fit both small and large markets. This makes MiCA complex, since it combines different kinds of requirements—prudential (i.e., rules related to financial stability and risk management, ensuring firms have sufficient capital and safeguards in place), market conduct (i.e., guidelines for fair and transparent behavior in the market to protect investors and promote trust), and white paper disclosures (i.e., obligations for issuers to provide detailed, transparent information about crypto-assets being offered to the public)—all into one document. For the relevant players, including those involved in issuing, trading, providing services or regulating crypto-assets, as well as the investors participating in these markets, it is difficult to grasp the full scope of MiCA. Therefore, enforcing the new regulation will require a more skilled workforce and additional resources. Without sufficient enforcement and clear guidance, the effectiveness of the regulation will be undermined, which hinders the goals of improving investor safety and financial stability.

4.2.7. Insufficient Guidance

Financial market authorities frequently have a lengthy response time. It might take weeks, if not months, to receive a response from the responsible authority. In some cases, responses are broad and vague, since the authorities use an ex-post approach, which involves evaluating projects only after they have entered the market rather than providing comprehensive guidance prior to their launch. Meanwhile, companies are worried about compliance and need guidance in due time. This has generated substantial concern about a potentially inconsistent application of MiCA across Member States. Variations in the interpretation of specific rules, for example, could compel companies to relocate to jurisdictions with more lenient timelines and rules, resulting in regulatory arbitrage and obstructing the whole notion of harmonization. The crypto sector has also identified a disconnect between legislators and regulators responsible for enforcing the new regulation. Frequently, the individuals responsible for the development of the regulations possess a wealth of experience in traditional finance, including securities and banking, but they lack a deep understanding of blockchain and digital assets. This knowledge disparity leads to regulations that do not always correspond with the practical realities of the crypto market. Rather than relying exclusively on regulators’ input, numerous industry professionals have advocated for increased public consultations and practical input from market participants. This results in a knowledge gap, with regulators having access to more data and resources than the businesses they regulate. At the same time, companies struggle to obtain the clear and actionable guidance they need.

4.2.8. Global Scope

Crypto operates on a global scale. With MiCA, the EU leads the way in regulation, but there is also the need for a coordinated global approach. In this regard, one challenge is the absence of a third-country dimension (i.e., the involvement, consideration, or treatment of countries outside the EU) in MiCA. Many exchanges already have a global platform, but they need to set up a licensed entity in the EU that acts as a broker for the global platform. Forcing exchanges to create such an EU-specific platform fragments the liquidity pool, which can result in higher fees for customers.

4.2.9. Environmental, Social, and Governance Principles

There is doubt whether the new framework adequately supports ESG principles. MiCA introduces disclosure requirements related to adverse climate impacts and other environment-related impacts. For example, this pertains to the consensus mechanism used to issue the crypto-asset, but it is doubtful whether this requirement will yield a positive impact that justifies imposing significant burdens on CASPs. In particular, the data and the level of detail that is necessary to comply are often not accessible to service providers, particularly when it comes to energy use. Additionally, it is questionable whether these disclosures provide investors with any value, and overly technical information might be challenging for them to understand. Although MiCA’s objective is to enhance transparency, it is uncertain whether these requirements will improve the decision-making process for investors or merely add another layer of complexity.

4.3. Recommendations for Improving MiCA’s Content

The experts agree that some time must pass after MiCA has been fully implemented before it is possible to expand and revise it. A few years of experience are needed to see how the regulation works in practice before rushing into new rules. In general, it is recommended to remove rules that cannot be comprehensively enforced within two years. If a rule is not enforced, noncompliant players will benefit and drive out the compliant companies. Specific recommendations pertaining to the content of MiCA are provided in the following sections.

4.3.1. Scope and Definitions

One area that needs clarification is MiCA’s scope. There should be a clearer understanding of what constitutes a financial instrument. In addition, some areas, such as DeFi and NFTs, are left out of the regulation, leading to regulatory gaps. Incorporating these areas and other emerging categories would result in a more comprehensive framework that does not favor some parts of the markets.

4.3.2. Technology-Neutral Framework

The current version of MiCA focuses on specific technologies (i.e., crypto-assets), limiting its adaptability. Instead, the regulation should be designed to accommodate new and emerging technologies, allowing for greater flexibility and fostering innovation.

4.3.3. ESG Disclosure Requirements

The ESG reporting requirements under MiCA can be challenging due to limited access to relevant data. Simplified, more targeted disclosures would make it easier for service providers to comply and help investors better understand the relevant information, which would improve overall transparency.

4.3.4. Cross-Border Market Access with Equivalence Regimes

MiCA should include equivalence regimes similar to those used in banking regulations. This would enable service providers from non-EU countries with comparable standards to enter the market, encouraging competition and benefiting both investors and the broader industry.

4.3.5. Regulatory Sandbox for Startups

The experts recommend creating a sandbox environment under MiCA to attract startups to a safe space for testing their products and services. Existing sandbox initiatives across various jurisdictions were introduced alongside MiCA, but they have limited capacity and a temporary timeline and are unable to support the full range of startups in the rapidly growing crypto sector [28]. They often operate independently, leading to inconsistencies and gaps in guidance. The sandbox program should be expanded to increase capacity, establish permanent advisory services, foster coordination across Member States, and promote collaboration between regulators and industry stakeholders. This would help innovators experiment with new ideas while receiving regulatory feedback, minimizing compliance risks, and supporting a more dynamic market. It would also provide regulators with valuable insights into emerging technologies, allowing for timely adjustments to the framework.

4.3.6. Consumer Crypto License

Implementing a consumer-focused crypto license could help mitigate risks for individual investors. This would involve instructions on the risks and benefits of crypto-assets, ensuring that consumers gain a solid understanding before entering the market. This approach would enhance consumer protection and promote informed decision making.

4.3.7. Personal Liability Provisions

Currently, MiCA places personal liability on the managers of crypto-asset issuing companies and CASPs, which may deter skilled leaders from participating. Shifting the focus to corporate liability instead would reduce this risk and attract more qualified industry professionals.

4.3.8. Regulatory Priorities

MiCA should concentrate on a core set of essential regulations, leaving additional issues to be handled through separate legal acts. This would streamline the regulatory landscape, making it easier for companies to comply.

4.3.9. Compliance Requirements Based on Company Size

Compliance rules should be tailored to the size and experience of the company. Smaller firms and those that enter the market might need lighter initial requirements, which would encourage innovation while maintaining key compliance standards.

4.3.10. Alternative Methods for Client Fund Segregation

The current requirement that client funds must be held at credit institutions could limit innovation in the crypto space. Allowing for secure alternative fund segregation methods would reduce dependency on traditional banks and support the development of innovative financial services.

4.3.11. Global Standards for Crypto Regulation

MiCA should advocate a shared global standard for crypto regulation. While different regions may have unique needs, establishing common minimum standards would level the playing field and increase investor confidence.

4.3.12. Competitive Market Environment

Increasing competition benefits consumers by fostering innovation and reducing costs. MiCA should avoid imposing excessive regulatory barriers that could hinder new entrants and small businesses, ensuring a diverse and competitive market landscape.

4.4. Recommendations for MiCA’s Implementation Process

Over the coming years, the implementation of MiCA will reveal how the market is impacted by the new rules. It is imperative to accumulate data for two to three years to detect unnecessary burdens, overregulation, or loopholes. This experience-driven approach will enable regulators to optimize the framework, guaranteeing that it properly adapts to market requirements. Recommendations for improving the implementation process are outlined in the following sections.

4.4.1. Roles of Regulators and Legislators

It is imperative to establish a clear distinction between regulators (e.g., ESMA and European Banking Authority) and legislators (e.g., the European Parliament and Commission). From time to time, regulators exceed their authority beyond their mandate, thereby introducing further layers of complexity to Level 2 texts, which impose unnecessary burdens on market participants.

4.4.2. Consultation and Communication Processes

The regulatory response procedure is slow, and the guidance provided often lacks details, even when companies have submitted detailed descriptions of their business models. In this regard, businesses would benefit from a consultation process that is more responsive and efficient, as it would enable them to obtain timely, actionable advice.

4.4.3. Explanatory Recitals

Companies would gain a more comprehensive understanding of regulatory intentions by incorporating more detailed recitals within MiCA to explain the rationale behind specific provisions.

4.4.4. Consultation and Guidance

The information vacuum surrounding MiCA results from the fact that a significant portion of the current guidance is directed at regulators rather than market participants. Companies should have access to comprehensive guidelines regarding technical standards, reporting requirements, and expectations. Regulators possess more data and insights than market participants, resulting in an information asymmetry. Additional public consultations with companies would contribute to better-informed regulatory decisions and ensure that industry feedback is adequately considered.

4.4.5. Interpretation

MiCA covers diverse areas, which can be interpreted differently depending on the context or the nature of the business. Some provisions are vague and need further interpretation. Companies would be able to implement the rules faster and reduce legal uncertainty with clear, actionable interpretations of how MiCA provisions apply to their specific activities. By clarifying vague terms or providing examples, EU authorities can help businesses avoid the risks of non-compliance.

4.4.6. Using MiFID II Expertise to Facilitate MiCA’s Transition

The expertise gained from MiFID II can be leveraged by MiCA, as the regulations share numerous similarities. Businesses would be able to adjust to the new regulatory environment more easily by applying the lessons learned from MiFID.

4.4.7. Education and Training

It is important for companies to ensure that their staff is adequately instructed regarding MiCA’s requirements. Firms could enhance compliance and mitigate the risks by providing their employees with relevant training. Simplified guides, tailored training programs, interactive workshops, and multilingual resources need to be developed to meet the needs of companies.

Figure 1 summarizes all benefits and challenges, as well as the recommendations for MiCA’s content and its implementation.

4.5. Theoretical Integration into the TOE Framework

The technology–organization–environment (TOE) framework is a model that is used to analyze how technological, organizational, and environmental factors influence the adoption and implementation of innovations within organizations. It was suggested by DePietro et al. [29] and has been adapted to explain blockchain adoption [30]. Integrating MiCA’s benefits, challenges, and recommendations into the TOE framework offers a structured and theory-driven approach to better understand the adoption and proliferation of crypto-assets and underscores the relevance of regulation.

4.5.1. Technology Dimension

MiCA impacts the technological dimension of TOE by fostering a supportive environment for innovation while ensuring regulatory compliance. It emphasizes technological readiness and ensures that businesses can adopt and integrate advanced tools, while being supported by clear guidelines for crypto-asset issuance, custody, and trading. This reduces uncertainty and enables firms to invest in long-term innovation and product development. The harmonized framework under MiCA allows for the seamless deployment of services across the EU, enabling companies to capitalize on cross-border opportunities. Trust in technology is a cornerstone of MiCA, achieved through enhanced transparency measures such as mandatory disclosures and stringent compliance standards, which create confidence among investors and market participants.

4.5.2. Organization Dimension

MiCA fosters organizational development by addressing critical issues such as resource needs, structural adjustment, and strategic alignment. It helps organizations allocate resources more effectively by clarifying compliance requirements and reducing redundant efforts caused by fragmented regulations. The harmonized framework requires companies to make structural adjustments, such as implementing robust risk management systems and integrating ESG considerations, which drive efficiency and ensure long-term sustainability. Furthermore, MiCA’s consistent regulatory approach allows firms to align their strategies with a unified market framework, which enables them to pursue growth and innovation while staying compliant.

4.5.3. Environment Dimension

MiCA can drive significant market transformation, both within the EU and globally, by creating a benchmark for crypto-assets regulation. It addresses systemic issues of the industry, such as market abuse and fraud, fostering a more secure and transparent marketplace. By harmonizing rules across Member States, MiCA creates a market that promotes fair competition and innovation while eliminating inefficiencies caused by regulatory fragmentation. Globally, MiCA establishes the EU as a leader in creating standards for crypto-assets regulation, potentially influencing other jurisdictions to adopt similar frameworks and enabling cross-border collaboration. Furthermore, MiCA incorporates ESG requirements, compelling firms to disclose their environmental impact. By enhancing transparency and accountability, these measures push the industry toward adopting sustainable practices and responding to concerns about the environmental footprint of blockchain technologies. Figure 2 integrates the topics discussed into the three dimensions of the TOE framework.

5. Implications

The findings of this study have significant implications for businesses, regulators, academics, and policymakers, offering insights to optimize MiCA’s implementation and refine its theoretical underpinnings.

For businesses, particularly crypto-asset service providers (CASPs) and stablecoin issuers, the harmonized framework under MiCA reduces cross-border compliance costs. However, the stringent operational and reporting obligations require substantial resources. This will lead to market consolidation in favor of larger companies. Additionally, the lack of clarity and overlapping regulations (e.g., MiFID II) necessitate proactive engagement with regulators to seek guidance, emphasizing the need for robust legal and compliance teams.

For regulators, the challenges of enforcement and inconsistent interpretations across EU Member States highlight the need for harmonized supervisory practices. Establishing dedicated regulatory sandboxes would allow iterative feedback loops between innovators and authorities, fostering compliance while nurturing innovation. Improving regulatory communication through faster consultation responses, detailed recitals, and multilingual training materials could bridge the knowledge gap between traditional financial regulators and crypto-native businesses. Moreover, addressing gaps in MiCA’s scope (e.g., DeFi) and clarifying definitions (e.g., financial instruments) are critical to preventing regulatory arbitrage and ensuring comprehensive market oversight.

For academics, the integration of MiCA into the technology–organization–environment (TOE) framework advances the theoretical discourse on blockchain adoption and regulatory frameworks. By mapping MiCA’s provisions to the TOE dimensions, this study demonstrates how regulatory interventions can shape technological readiness (e.g., standardized custody protocols), organizational adaptability (e.g., ESG integration), and environmental stability (e.g., cross-border harmonization). This approach validates the TOE framework’s applicability to crypto-asset regulation and provides a structured lens for analyzing future regulatory innovations. Furthermore, the identification of MiCA’s dual role—as both a catalyst for trust and a potential barrier to innovation—offers a nuanced perspective on the interplay between regulation and technological disruption, enriching debates in financial governance and institutional theory.

Policymakers must understand that MiCA’s success hinges on balancing market integrity with flexibility. Consequently, they must consider global coordination, advocating for equivalence regimes to integrate non-EU firms with comparable standards, thereby preventing market fragmentation. This study’s call for simplified ESG disclosures and alternative fund segregation methods aligns with broader EU sustainability goals while reducing compliance complexity.

6. Conclusions, Limitations, and Future Research

MiCA is a first step toward regulating the crypto-assets market in the EU. It aims to promote innovation, protect investors, and enhance transparency. However, its future impact heavily depends on clear guidance, adaptive enforcement, and stakeholder engagement. In this paper, we present findings from interviews with 12 industry experts, which reveal numerous benefits and challenges of the new regulation. Furthermore, we provide recommendations regarding the content of MiCA and its implementation. Key benefits of MiCA, such as passporting, a robust regime against market abuse, enhanced investor protection, and targeted support for innovation, offer substantial opportunities for market consolidation, increased transparency, and sustained growth within the EU crypto-assets market. Yet, important challenges remain, such as stringent compliance requirements, including capital reserves and reporting standards. These may impose a substantial financial and operational burden on businesses, particularly smaller firms and startups. The lack of detailed regulatory guidance during the early stages of implementation leaves companies struggling to fully understand and comply with complex obligations. Moreover, the introduction of a personal liability mechanism holds executives, founders, and key personnel directly accountable for regulatory breaches, which could drive innovation away from the EU.

Our findings are limited by the scope of the expert panel and the information that was available at the time of writing this paper in early 2025. Future research should assess MiCA’s real-world application over time, such as its influence on market stability, compliance costs and innovation ecosystems. We explicitly encourage future research to incorporate practical experiences with MiCA (e.g., case studies) and to study its impact on certain industries. Specifically, future research can address the following areas: first, information is needed on how effectively MiCA achieves its proclaimed objectives, such as market stability, consumer protection, market consolidation, and access to services. Second, it needs to be explored how MiCA aligns with international frameworks and sets global standards. Third, the potential impact of MiCA on emerging use cases, such as decentralized finance (DeFi) and nonfungible tokens (NFTs), needs to be explored.

In conclusion, MiCA is considered an important step toward developing a rigorous regulatory framework for crypto-assets in the EU. However, there is a need to maintain a balance between market integrity, such as ensuring that the market operates in a way that protects investors, promotes trust, and prevents misconduct (e.g., fraud or market manipulation), and balancing the burden of the imposed regulatory requirements. The new regulation’s success will primarily depend on its capacity to adapt to shifts in the market and provide an open, equitable, and supportive environment for all parties involved.