The Markets in Crypto-Assets (MiCA) framework was architected to establish a unified, interoperable regulatory system for digital assets across the European Union. Its core technical function, the passporting of licenses, is now encountering implementation friction from national competent authorities. This divergence introduces systemic instability, as inconsistent application of the rules across 27 jurisdictions degrades the protocol’s primary objective of a harmonized market.
The immediate consequence is an elevation of operational risk and compliance complexity for service providers, directly impacting the efficiency of capital allocation and the integrity of the single market structure. This fragmentation creates the potential for regulatory arbitrage, a condition MiCA was explicitly designed to eliminate.
The foundational logic of MiCA, a unified regulatory market, is being tested by inconsistent national-level enforcement, threatening to replace the intended harmony with a complex patchwork of supervisory interpretations.
- Governing Framework ▴ Markets in Crypto-Assets (MiCA) Regulation
- Core Mechanism Under Review ▴ Single license “passporting” across 27 EU member states
- Primary Risk Vector ▴ Regulatory arbitrage from inconsistent national supervision
Signal Acquired from ▴ Cointelegraph
