Europe’s landmark crypto regulation, the Markets in Crypto-Assets (MiCA) framework, is entering a crucial phase. Yet as the July 1 transition deadline approaches, only a limited number of firms have secured authorization to operate under the new regime.

While regulators across the European Union continue to process applications, Germany has emerged as the clear frontrunner, issuing significantly more licenses than any other member state.

Less Than 60 Licensed Firms Across Europe

Despite MiCA becoming fully operational this year, fewer than 60 crypto companies have received authorization across the EU.

Many firms remain stuck in lengthy approval processes, with industry participants estimating that obtaining a MiCA license can take anywhere from eight to twelve months. As a result, a growing number of crypto businesses are facing uncertainty as regulatory deadlines draw closer.

Germany Establishes an Early Lead

Germany’s financial regulator, BaFin, has taken the most proactive approach so far.

The regulator has approved around 18 Crypto Asset Service Providers (CASPs), representing more than one-third of all MiCA licenses granted throughout Europe. Germany accelerated the process by shortening its transitional period and encouraging firms to submit applications earlier than many neighboring jurisdictions.

This strategy has given German-licensed firms an important competitive advantage: once approved, they can offer services across all 27 EU member states through MiCA’s passporting framework.

Other Countries Face Growing Backlogs

Several major European jurisdictions are progressing at a much slower pace.

French regulators have warned companies still operating without authorization that delays in applications and incomplete documentation are hampering approvals. A substantial portion of crypto firms in the country have yet to complete the licensing process.

Lithuania faces a similar challenge, with only a small percentage of registered crypto companies formally applying for MiCA authorization. Authorities have signaled stricter enforcement measures for firms that fail to comply.

ESMA Calls for Higher Standards

The European Securities and Markets Authority (ESMA) has also intensified oversight.

Following a review of licensing practices within the bloc, ESMA highlighted concerns around business model evaluations, conflicts of interest, technology infrastructure, and operational resilience. The agency has urged national regulators to apply more rigorous standards when approving crypto firms.

The recommendations are expected to influence how applications are reviewed across the European Economic Area moving forward.

Compliance Costs Push Firms Elsewhere

Germany’s strict interpretation of MiCA has drawn criticism from some market participants.

The costs associated with compliance, legal reviews, and operational requirements have become increasingly burdensome, particularly for smaller firms. As a result, several crypto companies have chosen alternative jurisdictions within Europe to establish their regulatory base.

However, Germany’s faster approval process and broader market access continue to make it an attractive destination for firms seeking long-term expansion across the EU.

The Race Against Time

With the MiCA transition period nearing its end, the divide between Germany and slower-moving regulators is becoming more apparent.

The coming weeks could determine which crypto companies gain seamless access to the European market and which remain trapped in regulatory queues.

For Europe’s digital asset industry, the licensing race is no longer just about compliance. It is rapidly becoming a contest for market leadership.