It’s now more than six months since the EU’s Markets in Crypto-Assets (MiCA) regulation came fully into force. As the world’s first comprehensive attempt to govern the cryptocurrency industry, kickback was always expected. And the criticisms have not been slow in coming. But while the limitations of MiCA have been causing problems within the EU, it may carry unexpected opportunity for the UK.
The missteps holding MiCA back
How do you begin to regulate a previously unregulated sector? You build upon the framework already in place for a vaguely similar market. At least, that’s what the EU did with MiCA, using the foundations of traditional finance regulation to build the principles that are now used to govern the crypto space. It’s a move that makes sense on paper, but in practice, it simply doesn’t work for a sector characterised by innovation. And that’s what’s got many people concerned.
The costs feeding creative and market stagnation
The crypto space has been defined by its ability to disrupt. Startups have brought endless innovation, leading to new technologies and formats – blockchain, decentralised finance, tokenised assets. But with the cost of compliance estimated to be €60,000 or more for a small company, and the risk of penalties of up to €5 million or 5% of a business’ annual turnover, entering the European crypto space has become prohibitively expensive. Startups are beginning to move out of the EU market altogether, and they’re taking their potential for innovation with them. As for the businesses that can afford these costs, the fear is that they will pass them on to their customers, scaring them into taking their business to other territories.
The stablecoin oversight
At the same time as smothering innovation, MiCA has also come under fire for failing to regulate stablecoins. Widely recognised as one of the riskiest components in the crypto space, with over $150 billion in stablecoins circulating globally, this is an enormous blunder. Leaving the possibility for a stablecoin crash to bring down both the crypto space and the wider financial market.
Lack of preparedness
A similar oversight is MiCA’s lack of preparedness against future innovation. While new businesses are being pushed out of the EU market, the space continues to develop overseas, and MiCA makes very limited provision for handling and regulating those developments. Bad actors can come from anywhere, taking advantage of the EU’s loopholes. MiCA seems not to have the tools in place to address these issues should they arise.
For the EU, these issues should be concerning. For the UK, however, they present an opportunity.
How MiCA could open doors for the UK
The UK isn’t known for its prowess in the crypto space. With only around 40 registered cryptocurrency businesses, it’s been slow to jump on the crypto bandwagon. But that could change, with a comprehensive strategy.
With the EU struggling in the grips of MiCA, the UK’s near-universal language, close proximity, and relatively stable political and financial position, looks appealing for EU crypto investors and businesses seeking an escape from MiCA. UK businesses just have to open the door.
My business is licensed in the UK, but we’re already well into the process of registering with MiCA in order to serve the broader EU market. With around 31 million users of cryptocurrency in Europe, potential EU market access could bring is enormous. Not only holding the power to build the value of individual businesses, but to boost overall confidence in the UK market.
This is particularly relevant at a time when the crypto investment demographic is widening. Research from my platform shows that older investors – those previously overlooked by the crypto space – have begun entering the market in significant numbers. Between March 2020 and March 2025, the number of 55–64-year-old crypto investors grew by 361%, while investors aged 65+ grew by 321%. With older investors typically having more funds to invest, it’s an exciting time to be part of this growing market. Businesses and the UK government just need to make provisions.
Could UK regulation support market growth?
It’s now widely known that the UK government is making its own move towards crypto regulation. The Financial Conduct Authority (FCA) has hinted at the implementation of new compliance standards in 2026. And it’s an undeniable risk, if we’re going to take advantage of the EU’s uncertainty. But it’s also undeniable that crypto regulation is necessary if we’re going to make a safer, more welcoming investment space. The positive is that the UK has MiCA to learn from.
With the ability to cherry-pick what MiCA got right and avoid what it got wrong, the UK can build a regulatory framework that works for both investors and businesses. One that can fight fraud without squashing future growth and innovation. Opening the space to all investors, not just the risk tolerant 18 – 34 age group that has so far dominated the space, but the more mature incomers who having dipped a toe, are ready to take the crypto asset plunge. If the UK can do that, it could become a world leader in the space, setting the global regulatory standard.
The crypto space has always been in a state of uncertainty. For many, that was part of its appeal – high stakes, high risk, exclusive membership. But when you have a limited customer base, growth is hard. Regulation holds the potential to open up cryptocurrency investment to a far broader market. To foster growth while closing opportunities for bad actors. But it has to be done properly. If the FCA does its job well, it could transform the UK’s crypto space and crypto standing. But the UK’s crypto businesses have to be willing to do their part too.
By Peter Curk, CEO at ICONOMI
