The End of the Wild West for Crypto Assets

Crypto assets are no longer unfamiliar to traditional investors. Starting December 30, the MiCA Regulation (Markets in Crypto-Assets) will take effect, introducing a more extensive and regulated market. This framework establishes consumer protections and imposes requirements on operators. Companies wishing to operate in this space will need to obtain a license or register with the National Securities Market Commission (CNMV), which has strengthened its authorization and oversight teams. Since September, entities have been able to apply for authorization, and major banks like CaixaBank, BBVA, and Banco Santander have been preparing their crypto offerings.

A Pioneering Framework

Despite criticism from those who believe this regulation conflicts with the decentralized and deregulated nature of crypto investments, MiCA is seen as a groundbreaking step. It mandates that entities advertising, selling, or advising on crypto investments must be authorized. However, existing operators will be granted a transition period to adapt.

“This creates a safer environment for the crypto asset market. Both financial operators and investors will enjoy protections and guarantees similar to those in traditional markets,” says Enrique Nieto, partner at Uría Menéndez. He also emphasizes that while these measures reduce risk, they do not eliminate it entirely—a point recently reinforced by the European Securities and Markets Authority (ESMA).

Favorable Treatment for Banks

Banks appear to benefit significantly from the new framework. “They receive more favorable treatment as they don’t require an explicit MiCA license and can operate using their existing banking licenses,” explains Alfonso López-Ibor, partner at López-Ibor DPM. Other entities, such as investment service companies or electronic money providers, can also offer crypto services, but only by notifying the relevant authorities in advance.

Broader Implications

MiCA’s influence extends beyond banks, impacting service providers such as exchanges, custodians of digital wallets, and trading platforms. It also affects token issuers, including those issuing asset-referenced tokens or e-money tokens, as well as token financing platforms and advisors.

Experts highlight that the regulation will enhance trust in stablecoins—tokens tied to real-world assets—by requiring issuers to maintain reserves and meet capital requirements. Other operational conditions address solvency, conflict of interest prevention, market abuse, and the misuse of privileged information. Transparency will also improve with detailed information sheets and restrictions on misleading advertising, ensuring consumers are aware of investment risks.

Professionalization and Legal Security

The regulation is expected to lead to greater professionalization and legal certainty in the crypto market. However, this will come with challenges. “Companies will face increased compliance costs, requiring significant investments in legal, technical, and governance infrastructure,” warns Victoria Moreno, a lawyer at López-Ibor DPM.

This scenario could pose challenges for entrepreneurs and smaller providers while fostering competition between traditional players, such as banks and fintechs. These entities will need to adapt to a market where new regulated operators are entering.

Security and Trust

Security and trust are repeatedly cited as key factors in broadening the crypto market’s appeal, particularly among more conservative investors. “Clear rules of the game benefit business development. Clients who might hesitate to invest in online platforms they don’t trust may feel more comfortable buying cryptocurrencies through a well-established bank,” predicts Xavier Foz, partner at RocaJunyent.

Regulation is expected to make crypto assets more accessible. “Previously, buying bitcoin was often done through word of mouth. Now, crypto assets will be available in banking apps alongside traditional products like credit cards. This could attract a new audience that previously hesitated to invest,” adds Enrique Nieto.

Streamlining Procedures

MiCA is also set to simplify cross-border operations within the European Union. Fernando Gutiérrez, partner at Bird & Bird, notes that entities already under supervision will face a more straightforward process. MiCA introduces a “passport” system, allowing entities authorized in one EU Member State to operate more easily in others.

“Spanish entities, for example, will apply through their national supervisor, who will coordinate with counterparts in other EU countries,” explains Gutiérrez.

Room for Improvement

The regulation is widely regarded as a starting point, with room for updates and improvements. “Future revisions, such as MiCA 2, could address areas like NFTs or decentralized finance, which are currently excluded. While the rules may not be perfect, having a regulatory framework is better than none,” concludes Foz.

Given the rapid pace of technological evolution, it is likely that new assets will emerge in the coming years, necessitating further regulatory adjustments. Europe will need to stay agile to adapt its regulations to future developments.

Adapting to the New Rules

As MiCA takes effect, entities operating without proper authorization will need to adapt. Some may benefit from a transitional regime, but the Spanish government has shortened this period from 18 to 12 months, ending on December 31, 2025.

The CNMV has confirmed that this decision has been communicated to ESMA. Providers operating in Spain without transitional benefits risk sanctions and could be listed as unauthorized entities, or what are colloquially referred to as “financial beach bars.”