The revision of the MiCA regulation and the Market Integration Package will bring fundamental changes to EU capital markets, crypto businesses, and crypto asset service providers. Check out the legal analysis and practical recommendations for CASPs, financial institutions, and DLT projects for 2026–2030.
1. Why the MiCA revision and Market Integration Package are coming
The European Union has long struggled with the fragmentation of capital markets: differing national rules, varying supervisory approaches and heterogeneous practices in trading, post-trading and asset management create barriers and increase the costs of cross-border operations. Once MiCA is fully effective (end of 2024), the logical next step is therefore a more targeted revisionand, at the same time, broader institutional intervention in the supervisory structure across sectors.
The Market Integration Package (MIP) is a legislative package that aims to transform the EU from "27 variations" into a truly integrated market. It does this in two ways:
- In terms of content: it primarily removes market barriers (trading, clearing, settlement, asset management, DLT), simplifies the single rulebook by moving key rules from directives to regulations, and amends the MiCA regulation in areas where practice has encountered gaps or duplications.
- Institutionally: it strengthens ESMA's direct supervision of selected "significant" market infrastructures and most crypto-asset service providers, while introducing significantly more robust supervisory convergence tools where national competence remains.
For legal practice, this represents a fundamental shift: from competition between domestic regimes (fees, speed, "style" of communication with the national authority) to competition in the quality of governance, data, processes and technological readiness for a single, stricter but more predictable supervisory regime.
2. MiCA in motion: from national authorisations to direct ESMA supervision
New architecture for authorisation and supervision of CASPs
In its first phase, MiCA harmonised content obligations and left authorisations and ongoing supervision to national authorities. However, the revised architecture envisaged in the MIP shifts key decision-making to Paris:
- Direct ESMA supervision of most crypto-asset service providers, including registration/authorisation decisions, extension of authorisations, ongoing supervision, investigation and sanctioning.
- Exemptions for entities for which crypto-asset services are not their main activity and for credit institutions that are already covered by centralised frameworks.
- Transitional provisions for the transfer of ongoing proceedings and supervision from national authorities to ESMA (to avoid a 'freeze' period and duplication).
Practical implications for crypto-asset service providers:
- The transition to a single authorisation process at ESMA will require a rebuild of the Target Operating Model: centralised compliance, standardised methodologies and consistent data across countries.
- ESMA-ready documentation will be more extensive and formal than in many of today's national processes, but it also promises predictability and a level playing field for all.
- Loss of "regulatory shopping": decisions that were once optimised by choosing a jurisdiction will shift to the areas of process quality, cyber resilience (DORA), AML/CFT and risk management.
Preserving the role of national authorities and why it matters?
Even with direct supervision by ESMA, the role of national authorities is significant. A properly set up model should:
- Ensure that national authorities carry out initial assessments of applications (completeness & merits check, local AML/CFT considerations, assessment of "close links") and submit a reasoned opinion to ESMA.
- Avoid duplication of requests and the "revolving door" of providing the same information over and over again – ideally by prohibiting the request for data that has already been provided and assessed.
This two-step model combines local market knowledge with ESMA's unified decision-making and reduces the time needed to reach a high-quality decision.
3. DLT Pilot 2.0: more flexibility, scalability and a meaningful simplified regime
DLT Pilot (sandbox for tokenised securities) is set to become more open and usable:
- Expansion of instrument types and volume limits to accommodate real market cases.
- A simplified regime for smaller DLT infrastructure operators with reduced administrative requirements but adequate safeguards.
- Expansion of the circle of entities authorised to operate DLT trading venues (DLT TV) and DLT trading & settlement systems (DLT TSS) to include entities that currently face formal barriers to entering the sandbox.
Where practice needs greater certainty on paper
- Threshold methodology: When calculating the aggregate market value of tokenised instruments, it is necessary to clearly define what is included in the denominator (only instruments on DLT TV/TSS, or also parallel activities of the operator – CASP services, investment services, CSD activities?). A published methodology and predictable statistical sources are desirable.
- Delegated adjustment of thresholds: If the executive is to adjust the limits, the basic act must explicitly specify the methodology, criteria and consultation obligation prior to the change.
- A simplified regime for DLT TV as well: not just for DLT SS/TSS. Otherwise, there is a risk that smaller innovators in the field of trading venues will be left out.
4. E-money tokens in settlement: where MiCA meets PSD2
The new rules are intended to enable the financial settlement of transactions in e-money tokens (EMTs) authorised under MiCA. In practice, however, operators of DLT settlement systems may find themselves at the interface with PSD2:
- Licensing issue: When is the provision of cash accounts for EMTs considered a payment service and when is it "only" a service under MiCA?
- Capital and prudence: If a PSD2 licence is required, how are capital requirements calculated and what safeguarding regimes apply to the holding of EMTs?
- Risk maps and segregation: How to set up segregation of funds, governance and audit trail so that the model complies with both regimes.
As the regulation does not yet clearly define the boundary between MiCA obligations and possible PSD2 requirements, it is advisable for the entities concerned to set up internal processes in good time so that they can comply with both regimes. This preparation should also include a prudent approach to capital planning, which will allow for a flexible response to the supplementedmethodological guidelines and delegated acts after their adoption.
5. Market infrastructures: who is "significant" and what does it mean
The reform introduces the category of ‘significant’ for key infrastructures:
- Trading venues: importance for the Union economy and significant cross-border dimension or high share of EU trading volume.
- CCPs: thresholds linked to open interest, OTC derivatives, margins, default funds or group composition.
- CSD: threshold > 5% of the value of annual settlements in the EU and/or specific structural criteria (e.g. multi-jurisdictional operations or intra-group links).
Consequence of "significant" status: direct supervision by ESMA, status reviewed at least once a year and competence may migrate between ESMA and the national authority depending on the current situation.
PEMO – Pan-European Market operator
The new PEMO (Pan-European Market Operator) category will allow a single legal entity to operate multiple trading venues in several Member States under a single authorisation. This shortens licensing chains, reduces duplication and facilitates scaling. Implementation will be important in the areas of outsourcing, conflict management, passporting and relations with host nationalauthorities.
Post-trading: CSD passporting and hubs
The changes to the CSDR and accompanying regulations are intended to:
- strengthen CSD passporting,
- define CSD hubs and mandatory reciprocal links,
- introduce a mandatory connection to the platform for currencies supported by T2S,
- strengthen open access (ESMA as an arbitration body for CCP ↔︎ trading venue access and interoperability).
The result should be easier access to EU-issued instruments and a real reduction in friction in cross-border settlements and collateral flows.
6. Single rulebook: transfer of competence rules to MiFIR and modernisation of processes
An important editorial step is the transfer of trading venue operating rules from MiFID II to MiFIR, which will reduce the scope for inconsistent transposition and strengthen the single rulebook. Procedural and sanction regimes across several regulations are also being moved upwards so that ESMA has a unified procedural toolkit (investigation, sanctions, supervisory interventions, convergence tools).
In practice, this means more consistent forms of action and predictability of procedures for regulated entities, regardless of sector (trading venue, repository, CRA, benchmark, ESG rating, etc.).
7. Timeline and transition periods: a realistic schedule
- The legislative process for the package will continue until the second half of 2026.
- The key parts of the Master Regulation/Directive are expected to be implemented within 12-24 months after entry into force (the exact deadlines will be determined by the final texts and transitional provisions).
- The SFR will replace the Directive upon entry into force, but will have multi-year transitions.
- For MiCA, in addition to the revision at the "MIP" level, secondary acts and guidelines will continue to be developed, which will flesh out the detailed obligations in practice.
From a portfolio compliance management perspective, it is reasonable to expect that the full implementation of the ESMA regime and related adjustments (DLT, CSD hubs, PEMO) will be put into practice between 2028 and 2030.
8. Checklist for entities (12 months before entry into force and beyond)
CASPs and fintech infrastructure providers
- Adjust internal management and organisation - Reorganise internal processes to meet ESMA's direct supervision expectations. This means having consistent internal rules, demonstrable control mechanisms and well-documented decision-making.
- Consider the timing of licensing procedures - decide whether it is more advantageous for you to apply for a new licence or an extension under the national authority, or to wait for the transfer of powers to ESMA.
Banks, securities dealers and trading venue operators
- Consider a new operating model – PEMO – examine whether it is advantageous for your group to operate as a pan-European operator with a single authorisation for multiple markets, rather than parallel licences in different countries.
- Prepare contractual documentation for the new rules – ESMA will have a more prominent role in disputes and open access requests. Your contracts and processes must be set up to meet the new harmonised requirements.
- Assess whether your infrastructure could become "significant" - check whether, under the new quantitative thresholds, you could fall into the category of entities subject to direct supervision by ESMA. This step has a direct impact on supervisory obligations and capital requirements.
CSDs and CCPs
- Prepare for new links and market organisation – plan how you will adapt to the emergence of so-called CSD hubs and how you will ensure mandatory links with other systems where required by the regulation.
- Review risk management and reporting – internal processes will need to be adjusted to be compatible with the harmonised standard that ESMA will use for all significant providers.
Prepare high-quality data and technical documentation – ensure that you can demonstrably calculate and monitor the limits that apply to DLT trading and settlement.
Prepare high-quality data and technical documentation – ensure that you can demonstrably calculate and monitor the limits that apply to DLT trading and settlement systems.
This means having accurate data, internal reports and tools for ongoing monitoring.
Review licensing requirements when using e-money tokens – if you plan to use e-money tokens under MiCA to settle transactions, analyse whether you also need to comply with payment services legislation (e.g. PSD2). Licensing, capital, client fund protection and segregation issues need to be thoroughly reviewed.
9. Conclusion: more predictability, higher standards, less arbitrariness
The MiCA revision and the broader Market Integration Package are the most significant changes to the supervisory architecture and rules since MiFID II/MiFIR. They will bring more predictable and consistent decision-making, but also higher standards for processes, data and resilience. Those who prepare in time – methodically, technically and in terms of documentation – can turnregulatory "costs" into a competitive advantage.
