Module 14: Taxation and Regulation (US and EU Edition)
European Union: Regulation Under MiCA
Chapter 8 of 12 · about 5 minutes
8.1 One rulebook for 27 countries
Node had friends in several EU countries. Each used different exchanges, and some had received emails in 2026 saying their exchange would stop serving them unless it obtained a licence.
"Why did so many exchanges send those emails at the same time?" Node asked.
"Because the EU now has a single crypto rulebook, called MiCA," said Hash. "Exchanges had a grace period to get licensed. That grace period ended on 1 July 2026. After that, only authorised providers could serve EU customers. It's the most comprehensive crypto regulatory framework in any major region."
This chapter summarises EU crypto regulation as of October 2026. Remember that while regulation is largely harmonised at EU level, taxation is not (Chapter 9).
8.2 What MiCA is
The Markets in Crypto-Assets Regulation (MiCA) is an EU regulation that applies directly in every member state. It covers crypto-assets that aren't already regulated as traditional financial instruments, and the companies that provide services related to them.
| Part of MiCA | What it covers |
|---|---|
| Stablecoins | Rules for issuers of e-money tokens and asset-referenced tokens |
| Other crypto-assets | White paper and marketing requirements for offering or listing tokens |
| Crypto-asset service providers (CASPs) | Licensing and conduct rules for exchanges, custodians, brokers, and others |
| Market abuse | Rules against insider dealing and market manipulation |
8.3 MiCA timeline
| Date | Milestone |
|---|---|
| 30 June 2024 | Stablecoin rules began applying |
| 30 December 2024 | MiCA became fully applicable, including CASP licensing |
| 30 December 2024 to 1 July 2026 | Transitional period for existing providers, which several member states shortened |
| 1 July 2026 | Transitional period ended everywhere; only authorised CASPs may provide crypto-asset services in the EU |
8.4 Crypto-asset service providers
A CASP must be authorised by a national regulator in one EU country. Once authorised, it can passport its services to other member states, rather than needing separate licences in each.
| CASP requirements (general) | Purpose |
|---|---|
| Capital and governance requirements | Financial stability and fit management |
| Segregation and safekeeping of client assets | Protect customers if the firm fails (Module 1, Chapter 7) |
| Complaints handling and disclosure | Fair treatment of customers |
| Conflict of interest rules | Reduce misuse of customer orders and assets |
| Record-keeping | Records of services and transactions for regulators |
The European Securities and Markets Authority (ESMA) maintains a public register of authorised CASPs. Checking whether a platform is listed is a simple, useful step before using it.
Chapter 8 · One rulebook, many tax systems
At the EU level, MiCA authorises a crypto-asset service provider in one member state to passport its licence across the others under a single rulebook. Below that, taxation remains national, so an identical gain is taxed under different rates and rules in Germany, France, Italy, Spain, or Portugal.
8.5 Stablecoins under MiCA
MiCA distinguishes two types of stablecoins:
| Type | What it references | Example idea |
|---|---|---|
| E-money token (EMT) | A single official currency | A euro or dollar stablecoin |
| Asset-referenced token (ART) | Other assets or a basket | A token backed by a mix of currencies or commodities |
Issuers need authorisation, must hold reserves, and must offer redemption rights. MiCA also includes extra requirements for very large stablecoins, and measures intended to limit large-scale use of non-euro stablecoins for payments, reflecting concerns about monetary sovereignty (Module 10, Chapter 5).
As a result of MiCA, some exchanges restricted or delisted stablecoins whose issuers weren't authorised under MiCA for EU users.
8.6 The travel rule
Since 30 December 2024, the EU's Transfer of Funds Regulation has required CASPs to collect and transmit information about the sender and recipient of crypto transfers, similar to rules for bank transfers. This is the travel rule introduced in Module 1, Chapter 14.
| Situation | What it means for users |
|---|---|
| Transfer between two CASPs | Your identifying information travels with the transfer |
| Transfer to or from a self-hosted wallet | The CASP may ask you to confirm ownership of the wallet, especially above certain amounts |
| Missing information | Transfers may be delayed or rejected |
This is why EU exchanges often ask you to identify the owner of a wallet you're withdrawing to, and may ask you to prove you control it (Module 2).
8.7 Anti-money laundering
The EU has also adopted a new anti-money laundering package, including a single rulebook and a new EU anti-money laundering authority. Among the rules due to apply from 2027 are restrictions on CASPs maintaining anonymous accounts or handling certain privacy-enhancing crypto-assets (Module 11, Chapter 11). Check the latest implementation dates.
8.8 What MiCA doesn't cover
| Generally outside MiCA | Notes |
|---|---|
| Fully decentralised services with no identifiable provider | DeFi remains a grey area; the EU has signalled it may review this |
| Unique NFTs | Generally excluded unless they're effectively fungible |
| Crypto-assets that are financial instruments | Covered by existing securities rules instead |
| Taxation | Each member state's responsibility (Chapter 9) |
8.9 What this means for users
- Use authorised CASPs. Check the ESMA register. Since 1 July 2026, unauthorised providers can't legally serve EU customers.
- Expect identity checks and travel rule questions on transfers.
- Expect tax reporting. Authorised CASPs also report to tax authorities under DAC8 (Chapter 10).
- Know that DeFi and self-custody remain your own responsibility (Module 2 and Module 9).
8.10 Try it yourself
Find the ESMA register of authorised CASPs. Check whether each exchange you use appears on it, and which country authorised it. Then look up what your exchange asks when you withdraw to a self-hosted wallet, and why.
Key takeaways from this chapter
- MiCA is a single EU crypto regulation covering stablecoins, token offerings, service providers, and market abuse.
- MiCA became fully applicable on 30 December 2024; the transitional period for existing providers ended on 1 July 2026.
- CASPs must be authorised in one member state and can passport services across the EU; ESMA keeps a register.
- Stablecoins are classified as e-money tokens or asset-referenced tokens, with reserve and redemption rules.
- The travel rule requires sender and recipient information on transfers, including checks for self-hosted wallets.
- New anti-money laundering rules due from 2027 restrict anonymous accounts and certain privacy assets at CASPs.
- MiCA doesn't harmonise taxation, and fully decentralised services remain largely outside its scope.