01/07/25
Two of the EU’s most important digital finance initiatives – MiCA and the digital euro – are shaping the future of payments, money, and crypto regulation in Europe.
They share common goals, but also reveal tensions that will need to be addressed for a balanced digital ecosystem.
🔍 What’s What?
MiCA (Markets in Crypto-Assets Regulation) sets the ground rules for private crypto assets – including transparency, reserve backing, licensing, and investor protection.
The digital euro is a central bank digital currency (CBDC) – issued by the ECB, designed to complement cash, and guaranteed by the state.
These two systems are meant to coexist – but how smoothly they do will depend on regulation, infrastructure, and market dynamics.
🤝 Where MiCA & Digital Euro Work Together
Shared infrastructure – MiCA-regulated providers already meet strict standards for custody and compliance. They’re well-positioned to support digital euro wallets and services.
User trust – A combination of public digital money and regulated private tokens can increase confidence in the entire system.
Technical compatibility – With careful planning, users can hold and use both types of digital assets in the same ecosystem.
🏦 When Competition Heats Up
The digital euro has some natural advantages: no issuer risk, no reserve requirements, and backed directly by the ECB.
For daily payments and savings, consumers may lean toward the digital euro – which could make it harder for private stablecoins to gain traction under MiCA rules.
⚖️ A Few Points of Friction
Uneven playing field – The digital euro isn’t subject to MiCA’s strict rules, while private issuers are. That could hurt competition.
Infrastructure access – If ECB-controlled rails are not open to all, MiCA players could be left out of critical digital euro integrations.
Governance concerns – The ECB acts both as issuer and overseer. Independent supervision is needed to ensure neutrality.
🔄 A Hybrid System – The Real Opportunity
Users could hold both private tokens and the digital euro in dual wallets.
Banks and MiCA-regulated firms can help distribute, manage, and convert between currencies.
🛠️ What Policymakers Need to Do
Balance the rules – Align MiCA and digital euro requirements to reduce unfair advantages.
🚀 Final Thoughts
MiCA brings regulatory clarity to crypto – the digital euro brings a risk-free, state-backed option. Together, they can power a new era of digital finance in Europe – if the right safeguards are in place.
But for this future to work, both private and public solutions must be treated fairly – and innovation must not be stifled by structural imbalances.
🔔 If you're a fintech, bank, CASP, or policymaker – now is the time to engage.
The window to shape how these two frameworks interact is still open – and the decisions made today will shape Europe’s financial future tomorrow. Contact us for expert guidance on crypto licensing across EU jurisdictions. #MiCARegulation
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Kätrin Särap