Article

The revision of the MiCA Regulation and the Market Integration Package will bring fundamental changes to EU capital markets, the crypto industry, and crypto-asset service providers. Read our legal analysis and practical recommendations for CASPs, financial institutions, and DLT projects for the years 2026–2030.

1. Why the MiCA Revision and the “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 costs for cross-border operations. Once the MiCA Regulation is fully effective (end of 2024), the logical next step is therefore a more targeted revision of the regulation, coupled with broader institutional intervention in the cross-sectoral supervisory structure.

The “Market Integration Package” (MIP) is a legislative package aimed at transitioning the EU from “27 variations” to a truly integrated market. It does so in two ways:

• Substantively: it prioritizes the removal of 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 where practice has encountered gaps or duplications.
• Institutionally: it strengthens ESMA’s direct supervision over selected “significant” market infrastructures and over 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 among 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 unified, stricter, yet more predictable supervision.

2. MiCA in Motion: From National Authorizations to Direct ESMA Supervision

New Architecture for Authorization and Supervision of CASPs

In its first phase, MiCA harmonized substantive obligations and left authorizations and ongoing supervision to national authorities. However, the revised architecture envisaged in the MIP shifts key decision-making to Paris:

• Direct ESMA supervision over most crypto-asset service providers, including registration/authorization decisions, scope of authorization extensions, ongoing supervision, investigations, and sanctions.
• Exemptions for entities for which crypto-asset services are not the main activity, and for credit institutions that already fall under centralized 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 authorization process at ESMA will require a redesign of the Target Operating Model: centralization of compliance, standardized methodologies, and consistent data across countries.
• “ESMA-ready” documentation will be more extensive and formal than in many current national processes; at the same time, however, it promises predictability and a level playing field for all.
• The end of “regulatory shopping”: Decisions that were once optimized by choosing a jurisdiction will shift to areas such as process quality, cyber resilience (DORA), AML/CFT, and risk management.

Preserving the role of national authorities and why it matters?

Even under direct ESMA supervision, the role of national authorities remains significant. A properly designed model should:

• Ensure that national authorities conduct 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 repeatedly providing the same information—ideally by establishing a prohibition on requesting 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”

The DLT Pilot (sandbox for tokenized securities) is set to become more open and usable:

• Expansion of instrument types and volume limits to accommodate real-world market cases within the regime.
• Simplified regime for smaller DLT infrastructure operators with reduced administrative requirements but adequate safeguards.
• Expanding the scope of entities authorized to operate a DLT trading venue (DLT TV) and a DLT trading & settlement system (DLT TSS) so that entities currently facing formal barriers can also enter the sandbox.

Where practice requires greater certainty right from the start

• Threshold methodology: When calculating the aggregate market value of tokenized instruments, it is necessary to clearly define what is included in the denominator (only instruments on DLT TV/TSS, or also the operator’s parallel activities—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 limits, the basic act must explicitly state the methodology, criteria, and consultation obligation prior to any change.
• “Simplified regime” also for DLT TV: not just for DLT SS/TSS. Otherwise, there is a risk that smaller innovators in the point-of-sale sector 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 (EMT) authorized under MiCA. In practice, however, operators of DLT settlement systems may find themselves at the intersection with PSD2:

• Licensing question: When is the provision of cash accounts for EMTs considered a payment service, and when is it “merely” a service under MiCA?
• Capital and Prudential Requirements: If a PSD2 license 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 fund segregation, governance, and audit trails so that the model complies with both regulatory frameworks.

Since the regulation does not yet clearly define the boundary between obligations under MiCA and potential requirements under PSD2, it is advisable for affected entities to establish internal processes in a timely manner 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 supplementary methodological guidelines and delegated acts once they are adopted.

5. Market Infrastructures: Who Is “Significant” and What Does It Mean

The reform introduces the “significant” category for key infrastructures:

• Trading venues: significance for the Union’s economy and a significant cross-border dimension or a high share of trading volume in the EU.
• CCP: 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).

Consequences of “significant” status: direct supervision by ESMA; status is reviewed at least once a year; and jurisdiction may shift between ESMA and a 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 license. This shortens licensing chains, reduces duplication, and facilitates scaling. Implementation will be crucial in the areas of outsourcing, conflict management, passporting, and relations with host national authorities.

Post-trading: CSD passporting and “hubs”

Changes to the CSDR and accompanying regulations aim 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 the 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 Modernization of Processes

An important editorial step is the transfer of rules governing the operation of trading venues from MiFID II to MiFIR, which will reduce the scope for inconsistent transposition and strengthen the “single rulebook.” Procedural and sanction regimes across multiple regulations are also being consolidated to provide ESMA with a unified procedural toolkit (investigations, sanctions, supervisory interventions, convergence tools).

In practice, this means more consistent procedures and predictability of processes 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 last until the second half of 2026.
• Implementation of key parts of the Master Regulation/Directive is expected within 12–24 months after entry into force (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 transition periods.
• For MiCA, in addition to the “MIP” level revision, secondary acts and guidelines will continue to be developed, which will in practice flesh out the detailed obligations.

From a portfolio compliance management perspective, it is reasonable to expect that the full “settling in” of the ESMA regime and related regulations (DLT, CSD hubs, PEMO) will be fully implemented by 2028–2030.

8. Checklist for entities (12 months before entry into force and beyond)

CASPs and fintech infrastructure providers

• Adjusting internal management and organization - Restructuring internal processes to meet the expectations of direct ESMA supervision. This means having uniform 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 license 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 license covering multiple markets, rather than holding parallel licenses in different countries.
• Prepare contractual documentation for the new rules – ESMA will have a more significant role in disputes and requests for

• (open access). Your contracts and processes must be set up to meet the new harmonized requirements.
• Assess whether your infrastructure could become “significant”—verify whether, based on the new quantitative thresholds, you might 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 interconnections and market arrangements - plan how you will adapt to the emergence of so-called CSD hubs and how you will ensure mandatory interconnections 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 harmonized standard that ESMA will apply to all significant providers.

Issuers and DLT projects

• Prepare high-quality data and technical documentation - ensure that you can demonstrably calculate and monitor the limits applicable 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 for transaction settlement, analyze whether you must also comply with payment services regulations (e.g., PSD2). It is necessary to thoroughly review issues related to licensing, capital, client asset protection, and segregation.

9. Conclusion: More Predictability, Higher Standards, Less Arbitrariness

The MiCA revision and the broader “Market Integration Package” represent the most significant change 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—methodologically, technically, and in terms of documentation—can turn regulatory “costs” into a competitive advantage.