ESMA Adds 14 New CASPs to MiCA Register, Licensing Pace Slows

The European Securities and Markets Authority (ESMA) has announced the addition of 14 new Crypto-Asset Service Providers (CASPs) to its interim Markets in Crypto-Assets (MiCA) register. This latest update brings the total number of licensed CASPs operating under MiCA regulations in the European Union to 294. Among the newly listed entities are Ripple Payments Europe, the European payments arm of blockchain company Ripple, as well as traditional financial institutions such as Portugal-based Bison Bank and Croatia's state-owned Hrvatska poštanska banka (HPB).

This move by ESMA marks the second significant register update since MiCA's transitional period concluded on July 1. The previous update on July 3 saw 37 CASPs added to the register. The smaller number of additions in this latest update suggests a deceleration in the pace of licensing compared to the initial surge. Other new entrants include two German cooperative banks, Volksbank Schwarzwald-Donau-Neckar and Raiffeisenbank Auerbach-Freihung, alongside Liechtenstein-based Kaiser Partner Privatbank. These additions underscore the continued integration of traditional financial institutions into Europe's regulated crypto market.

The MiCA regulation aims to establish uniform EU market rules for crypto-assets not currently covered by existing financial services legislation. Its key provisions encompass transparency, disclosure, authorization, and supervision of transactions, ultimately seeking to uphold market integrity and financial stability. The observed slowdown in the licensing process indicates that national competent authorities are adopting a more meticulous approach to evaluating applications, moving beyond the initial rush that characterized the transitional period.

ESMA has reported no changes to its registers for electronic money tokens (EMTs) or asset-referenced tokens (ARTs). The EMT register currently lists 21 unique issuers, while the ART register still shows no approved issuers. In a separate development, following enforcement actions by Italy's securities regulator, the Commissione Nazionale per le Società e le Borse (CONSOB), ESMA added two new entities, Reversal Investment Group and Kortex, to its non-compliant register. These additions bring the total number of flagged non-compliant entities to 164, a list that notably includes the major crypto exchange MEXC.

Analysts and market observers suggest that the MiCA regulation has led to significant consolidation within the European crypto market. While over 3,000 crypto firms were active at the outset of the transitional period, only a few hundred are estimated to hold full authorization now. This trend is compelling smaller and medium-sized firms to either exit the market or restructure their operations to comply with MiCA requirements. Looking ahead, increased regulatory clarity is expected to further attract traditional financial institutions to the crypto-asset market, though this could potentially lead to reduced competition within the sector.