Germany leads the EU crypto race with most MICA licenses

Germany has emerged as the forefront of Europe’s crypto-regulation space. It accounts for 36% of all licenses issued in the Crypto-Assets (MICA) framework market.

The recent approval of Bafin’s full MICA license in the Trade Republic, one of the continent’s leading fintech platforms, has strengthened this leadership position.

Trade Republic wins a full mica license as Germany cements the edge of the code

The license grants permission from the Trade Republic, provides custody of the cryptographic and facilitates transfer. The company can also execute or send client orders in 30 European Economic Areas (EEA) countries.

The Trade Republic manages client assets of over 100 billion euros, serves more than 4 million customers in 17 markets, and has a base of 2.5 million in Germany.

Circle executive Patrick Hansen pointed out that the license allowed the trade republic to internalize most of its crypto operations. The only exception is trade execution, but requires partnerships with external market manufacturers such as Bankhouse Sheich and B2C2.

“The Trade Republic can now operate almost any cryptocurrency that it offers in-house across all 30 EEA states. This relies on external market manufacturers (or trading platforms) such as Bankhaus Scheich and B2C2 to carry out trade,” Hansen said.

In effect earlier this year, MICA aims to harmonize EU-wide cryptocurrency regulations by introducing a single licensing regime in all member states. Companies that obtain approval in one country can now provide services across the EEA without seeking additional permissions.

This illustrates a major shift from the previous fragmented regulatory environment that required companies to navigate multiple state regimes. As a result, major crypto platforms such as Coinbase, Crypto.com, Kraken and OKX have since moved to new requirements.

However, the adoption rate is slower than expected. Only 15 CASPs registered under the framework within the first 100 days of implementation. According to Hansen, that number had increased to 25 as of May 17th, with most of these MICA licenses granted in Germany.

“German regulator Bafin has granted nine impressive 9 out of the first 25 MICA CASP licenses across the EU. 36% of all EU CASP licenses have been granted as of today,” Hansen said.

Hansen emphasized that MICA licensing is now essential for crypto companies seeking to operate across the EEA.

This requirement has caused a competitive rush between neobanks, brokers and traditional financial institutions, all racing to secure licenses.

“Neobanks, brokers, other fintechs, and even traditional banks are moving quickly to secure MICA licenses before the transition period ends,” Hansen said.