Europe’s Markets in Crypto-Assets Regulation is an EU law, but its effects extend far beyond Europe.
African cryptocurrency exchanges, stablecoin issuers, custodians, payment providers and blockchain startups may encounter MiCA when seeking European customers, banking partners, investors or commercial partnerships.
The regulation is already reshaping Europe’s crypto market. As the final transition period ends on July 1, 2026, reports indicate that only around 230 of more than 1,200 previously registered European crypto service providers have obtained full authorisation under the new framework.
That does not mean exactly 970 cryptocurrency exchanges are being removed from Europe. The figure includes exchanges alongside custodians, brokers, transfer providers, advisers and other crypto businesses.
Still, it shows how significantly MiCA is changing who can legally serve European customers.
For African crypto companies, the message is clear: access to Europe increasingly requires more than a registration in an African country or a globally accessible website.
What does MiCA mean?
MiCA stands for Markets in Crypto-Assets Regulation.
It is the European Union’s common regulatory framework for crypto-assets, token issuers and companies providing crypto-related services.
Before MiCA, crypto companies could face different registration and regulatory requirements in individual European countries. A business registered in one country was not necessarily permitted to provide the same services throughout the EU.
MiCA creates a more harmonised framework across the bloc.
Its rules cover areas such as:
- Cryptocurrency exchanges
- Crypto custody
- Trading platforms
- Crypto-to-fiat exchanges
- Crypto-to-crypto exchanges
- Customer order execution
- Crypto transfers
- Portfolio management
- Crypto investment advice
- Token issuance
- Stablecoins
- Consumer disclosures
- Market manipulation
- Governance and operational controls
The rules governing stablecoins began applying on June 30, 2024. The wider framework for crypto-asset service providers became applicable on December 30, 2024.
However, some companies already operating under older national registrations were allowed to continue temporarily through transitional arrangements.
The longest of those arrangements expires on July 1, 2026. After that point, firms relying on the transition must have full MiCA authorisation or stop providing regulated crypto services in the EU.
What is a MiCA licence?
The term “MiCA licence” is commonly used to describe authorisation as a crypto-asset service provider, usually shortened to CASP.
A company may require CASP authorisation if it provides services such as:
- Operating a crypto exchange or trading platform
- Holding customers’ crypto-assets
- Exchanging crypto-assets for money
- Exchanging one crypto-asset for another
- Executing customer orders
- Receiving and transmitting orders
- Transferring crypto-assets
- Managing crypto portfolios
- Advising customers about crypto-assets
The licence is not issued by one central EU licensing office.
A company applies to the relevant financial regulator in an EU member state. Once authorised, it can notify its home regulator that it intends to provide its approved services in other EU countries.
This is known as passporting.
For example, a company authorised in France may be able to serve customers in Spain, Germany, Italy and other EU markets without applying for an entirely separate MiCA licence in each country.
The company must still follow other relevant national and EU laws, but the CASP authorisation provides a common regulatory foundation.
How many exchanges are affected by MiCA?
There is no reliable official number covering only cryptocurrency exchanges affected by MiCA.
That is because MiCA applies to a much broader group known as crypto-asset service providers. This category includes:
- Exchanges
- Custodians
- Brokers
- Transfer providers
- Trading platforms
- Portfolio managers
- Crypto advisers
- Some banks and financial institutions providing crypto services
Recent reporting based on the ESMA register indicates that approximately 230 providers had secured MiCA authorisation by late June 2026. Europe previously had more than 1,200 crypto companies operating under national registrations. [2]
This suggests that roughly 970 previously registered providers had not obtained full MiCA authorisation by the final days of the transition.
However, this should not be interpreted to mean that all 970 are active exchanges being forced to close.
The group may include companies that:
- Withdrew their applications
- Decided not to enter the MiCA market
- Merged with another company
- Stopped offering crypto services
- Had applications refused
- Were still awaiting a decision
- Operated as custodians, brokers or advisers rather than exchanges
- Had limited or inactive registrations under the old system
The most accurate wording is therefore:
MiCA affects every crypto-asset service provider actively serving EU customers. Around 230 of more than 1,200 previously registered providers had obtained full authorisation by late June 2026, leaving hundreds of exchanges and other crypto businesses facing restructuring, restrictions or withdrawal from the European market.
The number of authorised firms is also changing as regulators complete additional applications.
What happens to unlicensed platforms?
The final MiCA transition period expires across the EU on July 1, 2026.
ESMA has said companies that remain unauthorised after the applicable transition must take immediate steps to wind down their EU activities in an orderly manner.
This may require an affected company to:
- Stop accepting new EU customers
- End advertising and promotional activity
- Stop offering new regulated services
- Prevent customers from opening new positions
- Allow existing customers to sell or close positions
- Process withdrawals
- Transfer assets where appropriate
- Maintain custody only while necessary for an orderly exit
- Communicate clearly with affected customers
The purpose is to prevent an abrupt disappearance that could leave customers unable to access their assets.
ESMA has advised European users to check whether their provider appears in its MiCA register. Customers using an unauthorised provider may need to transfer their assets to an authorised company or a self-hosted wallet.
Binance shows how serious the deadline is
The impact of MiCA can be seen in the difficulties facing Binance, the world’s largest cryptocurrency exchange by trading volume.
Binance sought MiCA authorisation through Greece but did not secure approval before the end of the transition period.
The exchange had explored licensing routes in Greece, Ireland and Latvia. European regulators reportedly raised concerns about its corporate structure, previous anti-money-laundering failures and the influence of founder Changpeng Zhao.
Without authorisation, Binance cannot continue offering its normal range of regulated services to EU customers after the transition in the same way it did under previous national arrangements.
The company has said it remains committed to Europe and will seek another route to authorisation.
The case demonstrates that MiCA is not merely a registration formality. Even a large global exchange with substantial financial and compliance resources may struggle to meet regulators’ expectations.
It also tests whether European regulators will enforce the same standards against large international companies that they apply to smaller providers.
MiCA affects exchanges at two levels
Crypto exchanges can be affected at both the company level and the product level.
Company-level authorisation
The exchange itself must have CASP authorisation to provide regulated services to EU customers.
Regulators assess whether the company has:
- Suitable directors
- Transparent ownership
- Adequate capital
- Effective management in the EU
- Strong cybersecurity
- Customer-asset protections
- Complaints procedures
- Anti-money-laundering controls
- Business continuity arrangements
- Proper management of outsourced services
A platform without authorisation may have to leave the market even when the individual assets it lists are otherwise permitted.
Product-level compliance
An authorised exchange must also review the tokens and stablecoins it offers.
A platform may have permission to operate but still be required to restrict a stablecoin whose issuer does not meet MiCA’s requirements.
European regulators instructed CASPs to comply with the rules governing non-compliant asset-referenced and e-money tokens by the end of the first quarter of 2025.
This led several exchanges to remove or restrict certain stablecoin services for European users.
A MiCA licence therefore does not allow an exchange to offer every crypto-asset without further checks.
Does an African crypto company need a MiCA licence?
An African company does not automatically need MiCA authorisation simply because its website can be opened from Europe.
The critical question is whether it actively targets or provides regulated services to people in the EU.
An African business may need MiCA authorisation when it:
- Advertises crypto services to EU residents
- Onboards customers living in the EU
- Operates a European trading platform
- Holds crypto-assets for European customers
- Executes transactions for EU users
- Opens a European office
- Markets a token in the EU
- Provides crypto transfers within Europe
- Partners with a European institution to offer regulated services
A licence from Kenya, Nigeria, South Africa, Rwanda or another African jurisdiction does not automatically provide access to the European market.
MiCA generally requires a CASP to be established as a legal entity in the EU. It must have a registered office in a member state, conduct at least part of its crypto activities there and maintain effective management within the bloc.
At least one director must be resident in the EU.
An African-founded company may therefore have to create a European subsidiary and apply through that entity.
Reverse solicitation is not a shortcut
MiCA recognises limited circumstances in which an EU customer independently approaches a non-European provider without being solicited.
This is commonly called reverse solicitation.
However, the exemption is narrow.
A non-EU exchange cannot actively market to European users and then claim that every customer approached it independently. Advertising, influencer campaigns, local-language promotions, affiliate programmes and targeted online content may all undermine that argument.
Reverse solicitation should therefore not be treated as an alternative licensing strategy for an African company deliberately seeking EU customers.
What regulators examine during an application
MiCA authorisation requires much more than establishing a company and paying an application fee.
Regulators examine the substance of the operation, including:
- The proposed services
- The business model
- The company’s ownership
- Directors and senior management
- Governance arrangements
- Internal controls
- Cybersecurity systems
- Customer-asset protection
- Outsourcing arrangements
- Complaints handling
- Conflicts of interest
- Anti-money-laundering procedures
- Business continuity
- Financial resources
- Operational presence in the selected country
ESMA has warned regulators to look closely at companies that attempt to establish only a minimal or artificial presence in one member state while managing the real business elsewhere.
An African company should not assume it can rent a European address, appoint one local representative and obtain access to the entire EU market.
Regulators expect meaningful local management, decision-making and oversight.
Capital requirements may disadvantage smaller firms
MiCA requires crypto service providers to maintain prudential safeguards.
The amount depends partly on the services offered. A company operating a trading platform or providing custody may face a higher minimum than one offering advisory services.
A CASP must generally maintain safeguards equal to at least the higher of:
- Its applicable minimum capital requirement; or
- One quarter of its fixed overheads from the previous year.
The business may also need to pay for:
- Compliance staff
- Legal advice
- Cybersecurity infrastructure
- Audits
- Insurance
- Local directors
- Risk management
- Regulatory reporting
- Customer-support systems
- EU office and operational costs
For a large African exchange, these costs may be manageable.
For a small startup, MiCA could make direct entry into Europe commercially unrealistic.
That helps explain why the number of fully authorised providers is substantially lower than the number operating under earlier national registration systems.
MiCA also creates an opportunity
The regulation is a barrier, but it can also provide a competitive advantage.
An African-founded company that obtains authorisation may gain:
- Access to customers across the EU
- A recognised regulatory status
- Greater credibility with banks
- More confidence from investors
- Better access to institutional partners
- Stronger customer trust
- A framework for cross-border expansion
Passporting is especially valuable.
Instead of completing completely separate crypto-licensing processes in 27 countries, a company can obtain authorisation in one home jurisdiction and notify its regulator before entering other EU markets.
The reduction in unlicensed competitors may also create space for well-prepared companies.
African businesses that invest in compliance early could serve customers left by platforms that withdraw from Europe.
Why stablecoins make MiCA relevant to Africa
MiCA’s stablecoin rules are particularly important for African markets.
Stablecoins are widely used across the continent for:
- Cross-border payments
- Remittances
- Crypto trading
- Business settlements
- Dollar-denominated savings
- Moving funds between exchanges
- Protecting against local-currency depreciation
MiCA separates regulated stablecoins into two major categories.
An e-money token, or EMT, seeks to maintain a stable value by referencing one official currency, such as the euro or US dollar.
An asset-referenced token, or ART, seeks to maintain its value by referencing another asset, right or combination of assets.
Issuers face requirements covering:
- Authorisation
- Reserve assets
- Redemption
- Governance
- Disclosures
- Own funds
- Liquidity
- Recovery planning
- Consumer protection
Only authorised credit institutions or electronic-money institutions can offer e-money tokens publicly in the EU. Issuers of asset-referenced tokens also require the appropriate authorisation.
An African stablecoin issuer seeking European users may therefore need to restructure its business before entering the market.
MiCA can affect African exchanges without an EU office
An exchange operating only in Africa may still feel MiCA’s effects indirectly.
This could happen when the exchange:
- Uses a European banking partner
- Gets liquidity from an EU-regulated platform
- Works with a European custodian
- Lists stablecoins affected by MiCA
- Raises money from European investors
- Shares infrastructure with an EU subsidiary
- Processes remittances originating in Europe
European partners may require African companies to demonstrate standards similar to MiCA even where the African company is not legally required to hold a CASP licence.
They may request evidence of:
- Customer-asset segregation
- Transparent ownership
- Audited accounts
- Cybersecurity controls
- Anti-money-laundering procedures
- Complaints handling
- Token due diligence
- Business continuity
- Risk management
MiCA could therefore become a global commercial benchmark as well as an EU law.
Remittance businesses may need more than MiCA
Europe is an important source of remittances to Africa.
A crypto remittance company may accept euros from a European sender, convert the money into a stablecoin, transfer it through blockchain infrastructure and pay an African recipient in local currency.
Several regulatory frameworks may apply to that transaction.
The company could need to consider:
- CASP authorisation
- Payment-services regulation
- Stablecoin rules
- Anti-money-laundering requirements
- Crypto transfer reporting
- Customer identity verification
- Data-protection law
A MiCA authorisation may not cover every part of the payment chain.
African companies building Europe-to-Africa stablecoin corridors should therefore assess both crypto and payment-services laws.
What African regulators can learn from MiCA
African countries are developing their own approaches to virtual-asset regulation.
MiCA offers possible lessons in:
- Defining regulated crypto services
- Licensing service providers
- Protecting customer assets
- Regulating stablecoins
- Requiring transparent ownership
- Setting governance standards
- Preventing market abuse
- Coordinating cross-border supervision
- Creating public registers
- Allowing regulatory passporting
African governments do not need to copy MiCA word for word.
European requirements were designed for the EU’s financial system and may be too expensive for smaller African startups.
However, the passporting model is worth examining.
An African crypto company currently expanding across the continent may need separate approvals in Kenya, Nigeria, South Africa, Rwanda and other markets.
A regional framework with common minimum standards could reduce duplicated licensing while improving cooperation between regulators.
What African crypto companies should do
African companies considering Europe should conduct a regulatory assessment before marketing their services there.
They should determine:
- Which services they intend to provide.
- Whether those services fall under MiCA.
- Whether they are actively targeting EU customers.
- Which EU member state would serve as their home jurisdiction.
- Whether they need additional payment or financial licences.
- Which tokens they can legally offer.
- Whether their stablecoin arrangements comply with MiCA.
- How much capital and local staffing they require.
- Whether their outsourcing arrangements will satisfy regulators.
- Whether their governance and cybersecurity systems are ready.
The cheapest or fastest jurisdiction is not necessarily the best choice.
A company needs a country where it can establish credible operations, recruit suitable staff, obtain banking services and maintain a productive relationship with the regulator.
MiCA does not make crypto risk-free
MiCA authorisation means a provider has met regulatory requirements and is subject to supervision.
It does not guarantee that:
- The company cannot fail
- Crypto prices will not fall
- Customer funds can never be stolen
- Every listed token is legitimate
- Users will recover every loss
- The provider will never make an operational mistake
Customers should verify the exact legal entity providing the service.
A global exchange may operate through several subsidiaries, and only its European entity may hold MiCA authorisation.
