MiCA regulation: impact on financial institutions
After a gradual phase-in through 2023 and 2024, the EU’s Markets in Crypto-Assets (MiCA) regulation is now fully in effect. What does it actually involve and how can financial institutions (FIs) anticipate future developments in related crypto legislation? Here’s a rundown.
Markets in Crypto-Assets Regulation (MiCA regulation) in a nutshell
In 2023, the EU first introduced the so-called MiCA regulation. This framework, developed by the European Securities and Markets Authority (ESMA), was designed to govern cryptocurrencies and other crypto-assets not previously covered by existing financial legislation. MiCA aims to harmonise the rules around all things crypto across EU member states and introduces measures to improve consumer protection, prevent market abuse and insider trading and provide legal clarity for crypto-asset issuers and related service providers. With previous investigations and high-profile bankruptcies of overseas-based players like FTX and Mt. Gox still fresh in mind, the idea is that the new regulation will pave the way for responsible innovation in a more secure European crypto market.
Key points of the MiCA regulation
- Applicable to all crypto assets. The new legislation covers a broad range of crypto-assets, including traditional cryptocurrencies as well as newer concepts like stablecoins (referred to as asset-referenced tokens or ARTs) and e-money tokens (EMTs).
- Authorisation and licensing requirements. MiCA imposes requirements for crypto-asset service providers to obtain authorisation from the relevant national authority to operate. Once licensed in one EU member state, exchanges and wallet providers can ‘passport’ their services throughout the EU.
- Transparency, disclosure and consumer protection measures. Issuers of crypto-assets are required to publish detailed documentation that outlines key information about every asset they offer. These files must be reviewed and approved by the authorities before the assets can be offered to the public and traded. Additionally, cryptocurrency providers must also adhere to specific governance, capital and risk management standards similar to those applied to traditional financial institutions.
How does MiCA impact compliance teams?
By default, new legislation brings increased responsibilities for financial service providers that have to work with these new crypto-asset providers. The crypto landscape is evolving rapidly, as the EBA and the ESMA pointed out in their joint 2025 report on the matter. Financial institutions operating within the EU must not only adapt to MiCA as it stands today, but also be prepared for future market and regulatory changes. Even if an FI doesn’t directly offer crypto-asset services, the MiCA regulation still has significant implications for compliance teams that engage with providers. Here are two key considerations:
-> Third-party risk management
Financial institutions have to check that their crypto-asset partners – primarily exchanges – are compliant with MiCA, including transparency and operational standards. This ties back to the third-party risk management principles outlined in the DORA act, which we covered in our previous blog.
How Harmoney helps: due diligence and ongoing monitoring
Compliance teams must proactively manage their vendor due diligence. This typically involves regular vetting of their crypto partners’ licenses, internal controls, security measures and governance frameworks. The modular approach of our Harmoney platform enables compliance teams at FIs to establish and maintain continuous monitoring protocols throughout their collaboration with external partners, ensuring they are fully compliant with both current regulations and any future updates to standards.
-> Extended AML and KYC obligations
FIs need to ensure that the crypto-asset providers they work with have robust client onboarding and transaction monitoring processes to meet their own anti-money laundering (AML) and counter-terrorist financing (CTF) obligations. This involves conducting regular, in-depth risk assessments to identify how partnering with crypto-asset providers might increase their risk exposure, and adjusting internal AML measures accordingly.
How Harmoney helps: streamlined transaction monitoring for stronger AML/CTF policies
The transaction monitoring module on our Harmoney platform allows organisations to consolidate all of their KYC and AML-related policies and existing transaction monitoring systems – including NetReveal and SAS AML, for example – on a single platform. Compliance teams can easily set up automated client verification workflows, set custom rules or use our AI-assisted monitoring tools to take control of their policy-specific assessments. With continuous regulatory changes ranking among the top-three concerns for financial institutions, the ability to adapt swiftly to new requirements saves time and resources as legislation evolves.
The shift to fully integrated compliance ecosystems
Our Harmoney team knows the challenges compliance teams face when designing their framework and building blocks to tackle this legislation. That’s why leading financial institutions use our open architecture platform to connect all things compliance on a fully integrated ecosystem. For more inspiration on how leading players in the financial sector use our platform to build compliance with full peace of mind, check out the stories of Fund Channel and La Mondiale, or have a look at our other client testimonials.
Harmoney offers a cutting-edge digital platform that streamlines intricate onboarding and compliance procedures, featuring automated screening functionalities. Interested in discovering more about our innovative solution? Reach out to us for further details!