MiCA, cryptocurrency passport under attack

Rome — September 16, 2025. France opens an institutional clash over the application of the passport provided by the MiCA regulation (Reuters, EUR-Lex), considering limiting access to its market to operators authorized in other EU countries.

The move — anticipated by Reuters and reflected in internal documents of the Autorité des Marchés Financiers (AMF) — aims to curb the so-called regulatory arbitrage and tests the promise of a true single market for crypto services.

According to the documents and internal communications of the AMF examined by our editorial team, operational discussions on potential limitations have been ongoing since the second half of 2024.

Industry analysts contacted consider it a priority to clarify the MiCA/MiFID II scope to avoid cross-border disputes, given that the regulation applies directly in the 27 member states.

Regulation (EU) 2023/1114 was adopted on May 31, 2023, and published in the Official Journal of the European Union on January 9, 2024; the text also assigns ESMA the task of issuing guidelines on certain sensitive points by December 30, 2024, a relevant deadline for the uniform interpretation of the rules.

The Friction Point: What France Wants to Do and Why Now

The AMF is considering solutions to prevent or limit the operations in France of companies that exploit licenses obtained in member states perceived as more lenient.

In this context, the focus is on regulatory arbitrage (seeking lighter rules to gain competitive advantages), considered a risk for investor protection and market integrity.

The context: MiCA — Regulation (EU) 2023/1114 (EUR-Lex) — introduces a unique framework for crypto operators (CASP) with cross-border passporting.

In parallel, France is requesting more powers of centralized supervision for ESMA (European Securities and Markets Authority) over the largest players, along with Austria and Italy, to ensure application consistency at the EU level. That said, practical implementation remains the most sensitive issue.

What is MiCA and how does the passport work (without unnecessary technicalities)

MiCA is an EU regulation that applies directly in all member states and governs the issuance and public offering of crypto-assets, as well as the services of authorized operators (crypto-asset service providers, CASP).

The “passport” allows a CASP authorized in one EU state to operate in others, following a simple notification. The rules on CASPs are found in Title V of MiCA, which regulates authorization, conduct, and cross-border operations.

• Basic principle: access to the single market for compliant operators.
• Objective: harmonize supervision and transparency standards, reducing fragmentation.
• Limit: gray areas remain on the border between crypto-assets and financial instruments subject to MiFID II.

Why the French Initiative Ignites Tensions on MiCA

MiCA is a regulation (not a directive): it applies directly in all 27 EU countries. The idea of erecting unilateral barriers to the circulation of authorized operators therefore risks conflicting with the principle of the passport.

It should be noted that France responds by arguing that stricter safeguards are needed to prevent products similar to securities from accessing the crypto market through shortcuts, referring to the need for a clearer MiCA/MiFID II perimeter allocation.

Who is pushing for ESMA leadership

• France, Austria, and Italy have formally urged ESMA to coordinate the supervision of major pan-European operators.
• The positions have been sent to the Authority based in Paris, with the aim of reducing inconsistencies between national authorities.
• According to the signatories, for cross-border players, domestic supervision alone is insufficient.

Voices from the sector: single market at risk or enhanced protection?

According to Marina Markezic, executive director of the European Crypto Initiative (EUCI) (Reuters), blocking the passport would undermine the promise of the single market: “The power to block the passport technically exists but involves significant legal complexities,” she said.

On the other hand, Edwin Mata, lawyer and CEO of Brickken, highlights the legal limitations of national initiatives: «Legally, the AMF cannot prevent a duly authorized entity from operating; it can report and bring issues to ESMA, but cannot erect unilateral barriers», noting that MiCA, being a regulation, applies uniformly in all member countries.

What Would Change with Stronger ESMA Supervision

If ESMA took on a more decisive role on the main CASPs, the effects could be immediate:

1. Greater consistency in cross-border decisions and reduction of national divergences.
2. Uniform procedures to distinguish crypto-assets from MiFID II instruments, reducing gray areas.
3. Possible corrective interventions under the ESMA Regulation (EU No. 1095/2010), including mediation mechanisms between national authorities.

Legality of the Block: Regulatory Framework and Interpretations

The legitimacy of a selective block of the MiCA passport is a subject of debate:

• MiCA (Reg. 2023/1114): Title V recognizes the freedom to provide services at the EU level for authorized CASPs, subject to information and conduct requirements.
• MiFID II (Dir. 2014/65/EU): remains applicable if a crypto product falls under the definition of a financial instrument; in such a case, MiCA does not apply and stricter rules are in effect.
• ESMA Regulation (EU No. 1095/2010): grants ESMA powers of coordination, mediation between national authorities, and, in cases of violations of EU law, initiation of procedures to remedy them.

In summary: a general ban would be difficult to sustain at the EU level. Targeted and temporary interventions remain possible, provided they are proportionate and justified (for example, due to risk to stability or investor protection), with potential involvement of ESMA. Indeed, the balance between protection and market openness will be crucial.

Practical Impact on Operators and Clients

• Operators: risk of operational suspensions in individual countries, need for documentary adjustments, increase in compliance costs.
• Clients: potential disruptions in onboarding and transfers, more frequent communications on risks and updates to the terms of service.
• Market: potential temporary fragmentation until boundaries and supervision processes are clarified.

Three scenarios in the coming months

1. “Reinforced” status quo: France increases controls, ESMA pushes for convergence without changing the rules; manageable impacts for CASPs.
2. Centralized supervision for the big players: ESMA takes on a direct role over “significant” players, with guidelines and stricter common standards.
3. Dispute: unilateral actions lead to appeals and mediation interventions; the passport remains but with clearer guidelines on borderline cases MiCA/MiFID II.

Essential Timeline

• Ongoing: full implementation of MiCA for CASPs and initial adjustments of national supervision.
• Next 3–6 months: expected guidelines and additional Q&A from ESMA on controversial areas and cross-border notification processes.
• Within 12 months: possible proposal for regulatory fine-tuning or interpretative clarifications on the scope of MiCA vs MiFID II.

Cases and Data: Where Arbitrage Risk is Concentrated

According to industry operators, arbitrage occurs when licenses obtained in jurisdictions perceived as quicker or more flexible are used to expand complex services in larger markets.

The coordinated response of the authorities aims to avoid competitive asymmetries and protection shortcomings. Granular data on volumes, target markets, and types of licenses remain limited to private reports and national registers [data to be verified].

Conclusions

The tug-of-war between national sovereignty and the single market enters a decisive phase. The French stance against regulatory arbitrage addresses a real concern, but a block on the passport risks violating the MiCA architecture.

The game shifts to ESMA: greater coordination, interpretative clarifications, and, if necessary, targeted interventions to ensure a balance between innovation, fair competition, and investor protection.

Note: there are no public and unique data available on the number of potentially interested operators in France; official updates from AMF/ESMA and national registers will be needed to quantify the impact.