An influx of virtual asset services providers has been observed within the European Union in 2023, with close to 1,000 entities registering during the year.

Recent data indicates that the total count of registered crypto entities across the 27-member bloc has reached at least 11,597, based on information sourced from official registers in member states.

Surge From MiCA Implementation

This surge precedes the implementation of key provisions of the EU's Markets in Crypto-Assets law (MiCA), scheduled to go live in December 2024.

Member states retain the option to extend the transitional period until mid-2026.

In the coming months, member states are anticipated to compete for the attention of crypto entrepreneurs seeking to leverage MiCA's passporting rules.

These rules enable compliant firms to operate seamlessly across the EU under the new regulations set by Brussels.

MiCA is lauded as the inaugural comprehensive regulation for crypto assets, aiming to establish standardised practices for firms offering services to the EU's population of 450 million.

Firms aiming to access the EU market must designate one member state for passporting their license.

Czechia currently leads the registration statistics with 9,372 virtual asset services providers.

That being said, 83% of these entities are individuals, potentially introducing a bias into the results.

Poland, securing the second position, also allows individual registrations as VASPs, having 1,067 crypto service providers in its registry.

The country experienced a consistent addition of about a dozen new registrations per week in the last quarter of 2023, resulting in an estimated increase of around 100 entities since October.

Will MiCA Change Crypto in Europe?

Individuals currently registered as VASPs may face restrictions in obtaining a MiCA license, which imposes standards on capital requirements, internal controls, and governance.

In certain countries, such as Poland, the ease of registration serves as a strategic European foothold.

However, it's crucial to note that MiCA mandates legal entities to maintain a registered office in a European country.

Regulators at the European Securities and Markets Authority have issued recommendations to national authorities, urging vigilance against the creation of what they term "letter-box entities."

Some countries, like Estonia, have witnessed a decrease in registered crypto companies, while Belgium's VASP register remains unoccupied.

Slovakia and Romania reportedly lack established crypto registers.

Digital Euro

In October this year, the European Central Bank announced the next step of the digital euro initiative.

While the project may eventually not result in a digital stablecoin - the provision of such a intiative, together with the private sector's growing interest in the field, indicates the region's continued fascination with blockchain.