Crypto license in Europe

In an attempt to regulate the market of digital assets, the European Union has created a unified legal framework for the use of cryptocurrencies. This was achieved through the Markets in Crypto Assets Regulation [MiCA], adopted by the European Parliament in 2022. The complete legislative norms are planned to be implemented between 2025 and 2026, including a transition period for current cryptocompanies. In the near future, a standardized cryptocurrency regulation system will be established in the EU. However, at present, various European jurisdictions have their own rules and requirements for licensing crypto companies.

Cryptocurrency Regulation in Europe

The extensive MiCA project does not require EU member countries to make changes to their existing regulatory framework. However, it will assist each of them in protecting all participants in the virtual assets market — consumers and investors. The rules established in MiCA, as well as by the European Securities and Markets Authority, will complement national legislation.

The document introduces clear criteria for working with various digital assets, enabling the tracking of cryptocurrency operations and establishing rules for digital currency authorization in Europe.

Work on developing a unified cryptocurrency legal framework in Europe began in September 2020. However, MiCA is not the only regulation in the EU’s regulatory framework for the crypto market. Among the Europe blockchain laws, it is worth noting:

• EU Directive 2015/849 on the prevention of the use of the financial system for money laundering or terrorist financing (AMLD IV);
• EU Directive 2018/1673 on combating money laundering (AMLD 6);
• Directive 2014/65/EU on markets in financial instruments (MiFID II).

European jurisdictions, especially Lithuania, Estonia, Czech Republic, Poland, and Slovakia, are currently popular among crypto startups. In these crypto-friendly countries, it’s possible to obtain a VASP license with a smaller budget, granting the right to operate as a Virtual Asset Service Provider. They offer favorable conditions for crypto businesses, and less stringent regulatory requirements allow for a quicker licensing process and project launch.

Digital Asset License in Europe: What types of crypto licenses can be obtained in European countries

Depending on the jurisdiction and the goals of your project, you can obtain a crypto license for:

• cryptocurrency exchange;
• crypto bank;
• cryptocurrency exchange;
• crypto fund (for this activity an additional license could be required).

Crypto Trading Regulations in Europe — requirements set by regulators

To provide services related to virtual assets, service providers must:

• obtain a European Digital Currency License;
• register an office in the jurisdiction where permission is planned to be obtained;
• adhere to strictly established procedures for processing and storing clients’ personal data;
• contribute the minimum statutory capital [its size depends on the type of services provided];
• implement AML processes and appoint AML officer;
• create the required organizational structure for the company.

The main goal of Europe Crypto Regulations is to make the market transparent for all players and protect consumers from risks associated with investments in crypto assets.

The Most Popular Jurisdictions for European Cryptocurrency Compliance

For more detailed information about jurisdictions and nuances of obtaining a crypto license in each of them, you can consult experts at SBSB. Local regulators are responsible for blockchain licensing in Europe, hence the legal status, cryptocurrency regulation, and licensing requirements may vary.

Cryptocurrency License In Estonia

The Estonian regulator issues two types of crypto licenses. One allows the exchange of cryptocurrencies for fiat money and vice versa, while the other provides virtual wallet services. In Estonia, there are no strict requirements for reporting or accounting.

Cryptocurrency License In Lithuania

In Lithuania, there are no requirements for the residency of directors and shareholders, and the licensing procedure occurs without strict bureaucratic demands. In this Baltic jurisdiction, you can obtain two types of crypto licenses: a virtual currency exchange operator and a wallet-depository operator for virtual currencies.

Cryptocurrency License In Poland

The Polish jurisdiction does not require a large package of documents. Among the advantages of registering a crypto project in Poland are relatively low tax rates, no residency requirements for founders and directors, and the company’s AML officer. Obtaining a crypto license takes an average of four months. The Polish crypto license allows for providing clients with services for exchanging virtual currencies for fiat or other virtual currencies and servicing accounts for virtual wallets.

Cryptocurrency License In The Czech Republic

Crypto registration in the Czech Republic offers extensive opportunities for companies since the license functionality allows for creating a crypto fund or providing services as providers of such services — crypto exchange, crypto wallets, and initial coin offerings (ICO). The Czech jurisdiction is chosen for its simple and fast licensing procedure, as well as the possibility to open bank accounts in other European countries.

Cryptocurrency License In Bulgaria

Bulgaria offers some of the lowest tax rates in Europe. Business registration here is relatively quick and straightforward, and the founders and directors of the company do not necessarily have to be Bulgarian residents. The Bulgarian crypto license allows for the exchange of virtual assets and fiat currencies.

Cryptocurrency License In Italy

A crypto-friendly jurisdiction in Italy is suitable for crypto startups as it involves lower project launch costs. Italy does not require residency for beneficiaries and employees, simplifying licensing and business processes.

Cryptocurrency License In Switzerland

In Switzerland, you can obtain a fintech license, an investment fund license, and a license for a DLT trading platform. You can also join a self-regulatory organization (SRO) to provide financial intermediary services. Among the jurisdiction’s advantages, these licenses allow for managing a crypto exchange and crypto wallets, as well as conducting ICOs.

Cryptocurrency License In Portugal

Portugal offers low tax rates, and the regulator does not require hiring local employees. Many investors are attracted by the minimum statutory capital requirement — €1 per shareholder/partner. The functionalities of the Portuguese crypto license include the exchange of virtual assets and fiat currencies.

Cryptocurrency License In Slovakia

Slovakia is worth choosing for registering a crypto project due to its flexible taxation system and low tax rates. The business registration process is quite straightforward, and the crypto license allows for providing services for the exchange and storage of cryptocurrencies.

SBSB Fintech Lawyers specialists will assist in selecting the optimal jurisdiction for your crypto project, registering the company, and obtaining a license in Italy, Lithuania, Poland, Portugal, Slovakia, the Czech Republic, Switzerland, Estonia, and other European countries. We offer full-service legal support: from preparing required documents considering the legislation of the chosen jurisdiction, developing internal company regulations to the successful launch of the project and ongoing support.

Which EU Jurisdictions Are Suitable for Crypto Companies?

After the European Union adopted MiCA, any EU jurisdiction can be chosen for a crypto company. Under MiCA, an entity obtaining a crypto license in Europe can generally provide its services throughout the EU. The choice of an issuer of a crypto license in Europe depends on the company’s business model and operational considerations, such as its budget and ability to establish a local physical office.

Estonia, the Czech Republic, and Slovakia provide small startups with a favourable environment. In Lithuania, Cyprus, and the Netherlands, a strong fintech ecosystem can be an advantage. A Europe crypto license in France and Spain offers access to a large domestic market and a developed local crypto ecosystem. Austria and Germany are known for regulatory credibility and strong institutional reputation. In Croatia, the applied corporate income tax can be relatively low. Moreover, applying for a crypto license in Europe is not completely identical across EU jurisdictions, and the processing times can vary.

What Is the Difference Between VASP and CASP Authorisation?

Both CASP and VASP are popular regulatory concepts for crypto businesses across various jurisdictions. VASP (virtual asset service provider) differs from CASP (crypto-asset service provider) in terms of legal framework and regulatory regime.

VASP is used as a global guideline. This definition was developed by the Financial Action Task Force (FATF) as an international standard for businesses that work with digital money and crypto. Countries may implement the FATF standards differently, which is why the licensing process varies. Before MiCA, a crypto license in Europe VASP applied too.

CASP authorisation is required under the EU’s MiCA regulation (except Iceland), fully enforced in 2026, following the end of the final national transitional period. It applies within the European Economic Area (except Iсeland). CASPs can be involved in a broader range of specifically defined crypto-asset services across the EU jurisdictions. One uniform regulatory standard governs a European crypto license, but the application process may differ in details between EEA states.

How Does Passporting Work for European Crypto Licenses?

Under MiCA, a CASP authorised in an EU member state can generally provide its licensed crypto-asset services throughout the European Union. There is no need to obtain a local MiCA license. The process works in the following way:

1. The CASP submits an application for a license in a chosen EU member state.
2. Once approved, the CASP obtains a license in the home state.
3. Before providing services in other EU states, the CASP submits information about locations where it is going to operate, the intended starting date, and other details to the competent regulatory authority of the EU member state that granted the CASP authorisation.
4. The regulator of the home state communicates with regulators of host states.
5. The CASP receives the confirmation that this communication has taken place.
6. The CASP may commence providing services in another member state on the date it receives this notification, or no later than the 15th calendar day (backstop), following the submission of the relevant information, whichever occurs earlier.

Passporting does not require a physical office in each host member state. Also, it allows for a crypto license renewal in Europe.

How Can SBSB Help Choose the Right European Jurisdiction?

SBSB fintech lawyers can help choose the best EU jurisdiction for a crypto license in Europe by analysing a specific business model and comparing particular requirements, application processing timelines, and review styles of local regulators. Also, we help with a smooth crypto license renewal in Europe.