Crypto developments in the U.S. often dominate discussion — but it’s also shaping up to be a seismic 2025 for Europe.
As the new year begins, long-awaited Markets in Crypto-Assets Regulation (known as MiCA for short) will be in full force across the continent.
It’s already led to a significant shake-up in the stablecoins sector, with Tether retreating from the market because its assets are non-compliant.
Cryptonews has gathered a panel of experts to explore how the industry is set to evolve across the EU over the next 12 months.
‘Significant Changes’ Ahead
Marina Markezic, co-founder of the European Crypto Initiative, told us that MiCA’s arrival will see EU member states compete to become the most attractive place to do business — and vie for investment. She said:
“Jurisdictions that adopt MiCA efficiently and offer business-friendly environments are poised to become key crypto hubs, with countries like Germany and France being strong contenders. Still, others like Estonia, Malta or Portugal might also leverage their agile regulatory processes and competitive taxation to draw global players.”
Markezic explained that MiCA delivers a “harmonized regulatory framework,” with “license passportization” meaning a company that secures regulatory approval in one member state can then operate across the trading bloc.
EUCI anticipates that 2025 will deliver “a more mature and regulated crypto market” in Europe — giving legal certainty and confidence to institutional and retail investors, while encouraging blockchain adoption.
“Retail engagement has recently increased due to the upturn in the crypto market. The change in the USA administration and the ETF approvals later this year have given investors reason for optimism. Nonetheless, we do think that the majority of crypto retail users remain cautious, particularly given the historical volatility of the market.”
OKX Europe’s general manager Erald Ghoos agrees, telling Cryptonews he expects 2025 “to be a year of transformative shift for the crypto industry — particularly in the European landscape.”
“Bitcoin’s recent all-time high serves as a strong indicator of the growing trust and interest in digital assets. This surge, coupled with Europe’s new incoming MiCA regulation, highlights a pivotal moment for the industry here, bringing a much-needed framework that promises greater clarity, security, and stability.”
Ghoos believes investors across the continent “will gain access to clearer, safer opportunities within the crypto markets” thanks to MiCA.”
Chainalysis director of investigations Phil Larratt anticipates a renewed focus on compliance as the new year beckons, telling Cryptonews:
“There needs to be safe, secure and compliant product innovation that matches the pace of change, safeguarding crypto investors and service providers alike.”
MiCA Challenges and Wider Threats
While our Cryptonews panel does believe that MiCA is a step in the right direction, Marina Markezic from EUCI anticipates “quite a lot of confusion” — especially considering the 27 member states that make up this trading bloc might interpret the regulations differently. She adds:
“There is also quite a lot of uncertainty when determining which projects and assets fall within the scope of MiCA due to, partially, the question of what can be deemed ‘fully decentralised’ under the regulation. Similarly, there might not be enough certainty in the industry as to what constitutes a NFT and, thus, which tokens are not regulated by MiCA.”
This matters, Markezic says, because it determines whether projects need to create a whitepaper before publicly issuing tokens. She believes this increased scrutiny could also lead to reduced innovation, as smaller projects and newer initiatives may struggle to meet these demands.
But there are other ramifications to consider, too. EUCI predicts that a flurry of tokens will be delisted by centralized platforms because they fail to meet regulatory standards.
“Retail investors might see reduced stablecoin diversity on exchanges, impacting market liquidity and accessibility.”
Markezic also thinks MiCA “will accelerate the institutionalization and consolidation of the EU crypto market” — and spur a flurry of mergers and acquisitions between traditional finance and crypto-native firms, with some companies or specific products even “fading out.”
Another question mark concerns what all of this means for the decentralized finance sector. She says:
“Although MiCA largely excludes DeFi from direct regulation, questions about its treatment remain. This regulatory ambiguity could create friction, particularly if member states disproportionately attempt to regulate interfaces or service access points.”
Phil Larratt from Chainalysis warns brute force cyberattacks are on the rise — with social engineering and fraud now accounting for about 40% of crime in England and Wales, nations that now lie outside of the EU.
“It’s also evident that the public sector alone can’t solve crime-related challenges, and an ecosystem-wide holistic response is needed. Public sector organisations will need to work in partnership with knowledgeable industry players to share intelligence more expeditiously and implement more proactive data-driven initiatives to disrupt novel crime types. This will lead to a safer blockchain ecosystem.”
A Strategic Bitcoin Reserve for Europe?
European lawmaker Sarah Knafo made a splash in Brussels when she recently called on the EU to emulate Donald Trump by establishing a strategic Bitcoin reserve. She went on to warn that the development of a digital euro could lead to a “dystopian world.”
But is it at all likely that this trading bloc will start stockpiling BTC in 2025 — and is it a proposal that’s worthy of consideration? Markezic says:
“The idea of a Bitcoin strategic reserve is innovative but controversial, particularly in the financially conservative context of EU reserves. Any such proposal warrants thorough debate, focusing on its potential benefits and risks, particularly in the context of the strategic importance of Bitcoin and other cryptoassets — and how the EU would want to position itself from a purely competitive point of view.”
MiCA was long expected to be a huge draw for crypto businesses, with many fed up with “regulation by enforcement” from the SEC across the Atlantic.
But with Donald Trump entering the Oval Office in a few weeks — and vowing to offer a much more relaxed environment for the industry — the EU may find it’s now less attractive by comparison.
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