European Union policymakers have opened a review of a MiCA provision that allows a crypto exchange authorized in a single member state to serve customers across all 27 EU countries under one license, according to a CryptoSlate report.

The mechanism under scrutiny is the passporting rule embedded in the Markets in Crypto-Assets regulation. An exchange that secures authorization from one national regulator — commonly cited candidates include Malta, France and the Netherlands — can operate throughout the bloc without seeking separate approvals in each jurisdiction. EU authorities now view that arrangement as a loophole that concentrates supervisory responsibility in whichever member state grants the license first.

What does the review change for licensed operators?

For practitioners, the practical question is straightforward: what does this change for firms that built their European distribution strategy on a single authorization? If the review results in tighter conditions on passporting, exchanges would face additional national-level requirements, expanded reporting obligations to host-state regulators, or in a more restrictive scenario, a harder look at where their substantive business is actually conducted.

The current architecture places lead supervisory authority with the licensing jurisdiction. A firm authorized in a smaller member state, where supervisory capacity and fee structures may be lighter, effectively gains market access to the entire EU economy — roughly 450 million consumers — on the strength of one regulator's due diligence. That asymmetry is precisely what EU institutions now appear intent on correcting.

Compliance teams should track three dimensions of any follow-up legislation:

• Whether host member states gain powers to impose local conduct or disclosure rules on passported firms
• Whether the criteria for determining a firm's lead jurisdiction shift toward actual operational footprint rather than seat of incorporation
• Whether enhanced cooperation between national competent authorities introduces new arbitration or veto mechanisms

Why the timing matters

MiCA's licensing regime has been operational since December 2024, when the transition from national regimes to the unified framework began. Since then, a concentration of applications in a small number of jurisdictions has renewed concerns first raised during the regulation's negotiation: that regulatory competition among member states could replicate, inside a harmonized framework, the same forum-shopping the regulation was designed to eliminate.

The business consequences cut both ways. Tighter passporting conditions raise compliance costs for exchanges that treated one license as sufficient infrastructure for continental scale. They also strengthen the position of national regulators that have argued for broader supervisory reach over firms marketing aggressively into their territories while supervised elsewhere.

For legal teams, the review signals that MiCA should be read as an evolving framework rather than a settled rulebook. Firms planning European market entry, or weighing relocation of an existing authorization, should model scenarios in which the single-license advantage narrows over the coming legislative cycle.

No formal legislative proposal has been published yet. The direction of travel, however, is clear: the European Commission and co-legislators are preparing to revisit how crypto firms qualify for bloc-wide access, and market participants should expect concrete amendments to enter the pipeline as the MiCA review process advances.

By Nathan Brooks