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<p>In the Old Continent, regulation is as much a passion as a bureaucratic reflex. Here, people do not just monitor: they frame, mark out, lock down. And sometimes, those locks bear names such as MiCA or ESMA. Behind these acronyms lie increasingly strict rules on crypto, intended to protect without suffocating. But when application varies from one country to another, the entire ambition of the EU cracks.</p>
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  <h2 class="in-brief--title" id="in-brief">In brief</h2>
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   <li>MiCA has come into effect, but its application varies greatly between European countries.</li>
   <li>Germany issues crypto licenses while Luxembourg remains very restrictive in this regard.</li>
   <li>ESMA criticizes Malta and wants to unify practices to avoid persistent regulatory loopholes.</li>
   <li>Local regulators will need to become technicians, as Europe moves toward stronger centralization.</li>
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<h2 id="h-mica-when-european-ambition-meets-the-reality-of-member-states">MiCA: when European ambition meets the reality of Member States</h2>
<p>Since January 2025, the MiCA regulation (Markets in Crypto-Assets) has officially come into force. It promised harmonization of rules for all crypto sector players within the EU. But the unity shown on paper erodes on the ground.</p>
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<p>Germany, for example, has already granted over 30 crypto licenses, often to traditional banks. Meanwhile, Luxembourg has only approved three, solely for well-established heavyweights. This disparity fuels a risk of regulatory arbitrage: some players choose the most lenient jurisdictions, distorting competition.</p>
<p>Lewin Boehnke, Chief Strategy Officer at Crypto Finance Group, <a href="https://cointelegraph.com/news/europe-crypto-oversight-esma-centralization-podcast" rel="noopener noreferrer nofollow">did not mince his words</a>:</p>
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 <p><em>There is a very, very uneven application of regulation.</em></p>
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<p>ESMA (European Securities and Markets Authority) recently stirred the pot by singling out Malta’s MFSA: according to an official report, the Maltese regulator only partially met expectations in issuing crypto licenses.</p>
<h2 id="h-esma-wants-to-move-from-the-shadows-to-the-spotlight-in-crypto-supervision">ESMA wants to move from the shadows to the spotlight in crypto supervision</h2>
<p>What was just a technical debate becomes a political question. Should each country play its part, or should the baton be handed to a single conductor? For several Member States, the choice seems made.</p>
<p>France, Italy, and Austria support a <a href="https://www.cointribune.com/en/mica-the-eu-plans-to-extend-esmas-powers/" rel="noopener noreferrer nofollow">strengthening of ESMA’s role</a>. The idea is not to deprive local regulators of power, but to accelerate efficiency and unify practices.</p>
<p>Also according to Boehnke:</p>
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 <p><em>From a purely practical point of view, I think it would be a good idea to have a unified application of the regulation.&nbsp;</em></p>
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<p>But grey areas persist. MiCA, for example, requires the “immediate” return of assets held by custodians. Problem: no one knows what “immediate” means in the crypto world. This slows adoption, especially among banks. Uniform interpretation of these sensitive points therefore becomes crucial.</p>
<h2 id="h-crypto-and-regulation-in-europe-the-future-will-be-played-out-in-brussels">Crypto and regulation in Europe: the future will be played out in Brussels</h2>
<p>According to an op-ed published by GlobalCapital, national regulators must reinvent themselves. The future would no longer be in exclusive governance, but in technical support for a central authority.</p>
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<p>A model already exists: the European Central Bank directly supervises major banks while collaborating with national regulators. This hybrid model could apply to the crypto market.</p>
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<p>On the ground, the rise of ESMA is not seen as a competence conflict. It is viewed as an opportunity to create a single standard capable of competing with the US SEC. And with the rise of blockchains such as Solana, Avalanche, or Cosmos, clear regulation becomes essential to protect investors and make the crypto market credible.</p>
<h3 id="h-crypto-eu-key-landmarks-to-better-understand">Crypto &amp; EU: key landmarks to better understand</h3>
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 <li>2025: MiCA comes into effect, except for stablecoins (postponed to 2026);</li>
 <li>30+ crypto licenses already granted in Germany versus only 3 in Luxembourg;</li>
 <li>ESMA published a critical report on Malta in November 2025;</li>
 <li>France, Italy, Austria: declared support for centralized supervision;</li>
 <li>Major technical debate: legal definition of “immediate return” in MiCA.</li>
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<p>With ESMA at the forefront, Europe no longer wants to suffer the American agenda. It attempts to impose its own vision of financial regulation in the Web3 era. And in the global crypto arena, it intends to become the <a href="https://www.cointribune.com/en/crypto-how-europe-wants-to-enforce-its-version-of-the-sec/" rel="noopener noreferrer nofollow">sovereign alternative to the SEC model</a>.</p>

MiCA regulation poorly applied within the EU, ESMA ready to take back control

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