Interview with Sofia Andersson | Regulatory Affairs Director | Former Legal Counsel at European Banking Authority

MiCA — the Markets in Crypto-Assets Regulation — went into full effect in December 2024. It was supposed to bring clarity to European crypto markets. One year in, Sofia Andersson shares what's actually happening on the ground.

2049.news: Give us the honest assessment. Has MiCA delivered on its promises?

Sofia Andersson: Mixed results, honestly. The promise was regulatory clarity — one framework across 27 member states instead of a patchwork of national rules. On that front, MiCA succeeded. Companies now have a single license that works everywhere in the EU.

But clarity came with costs. The compliance burden is substantial. Smaller projects struggle to meet requirements. We're seeing consolidation — bigger players absorb smaller ones, or smaller ones simply leave Europe.

Is that good or bad? Depends who you ask. Regulators say it weeds out bad actors. Entrepreneurs say it kills innovation. Both are partially right.

2049.news: What surprised you most about the first year of implementation?

Sofia Andersson: The stablecoin provisions hit harder than expected. MiCA requires stablecoin issuers to hold 1:1 reserves in EU-regulated banks, with strict liquidity requirements. Sounds reasonable on paper.

In practice, many banks still refuse to work with crypto companies. So you have issuers who want to comply, who have the reserves, but can't find banking partners. It's a bottleneck nobody anticipated.

Tether decided not to pursue MiCA authorization. Circle got it. That split is reshaping euro-denominated stablecoin markets in real time.

2049.news: How are exchanges adapting?

Sofia Andersson: The major ones — Binance, Kraken, Coinbase — all obtained licenses. They had the resources to navigate the process. Their European operations are now fully regulated.

Mid-tier exchanges faced harder choices. Some consolidated operations into single EU entities. Others partnered with licensed providers. A few exited entirely, deciding the European market wasn't worth the compliance cost.

The interesting development is new entrants. Traditional financial institutions — banks, brokers — are launching crypto services under MiCA. They see an opportunity now that the regulatory framework exists. Competition is shifting from crypto-native versus crypto-native to crypto-native versus traditional finance.

2049.news: What about DeFi? MiCA was criticized for not addressing decentralized protocols.

Sofia Andersson: Correct. MiCA explicitly applies to entities, not protocols. If there's no identifiable issuer or service provider, MiCA doesn't reach it. That was intentional — regulators recognized they couldn't regulate code.

But here's the nuance. The boundary between centralized and decentralized is blurry. If a protocol has a foundation, a treasury, identifiable developers making upgrades — regulators might argue that's an entity subject to MiCA.

We haven't seen enforcement actions yet, but guidance is coming. The European Securities and Markets Authority is studying DeFi specifically. I expect proposals by late 2025 or early 2026.

Projects claiming to be decentralized should examine how decentralized they actually are. If decisions flow through a small group, that group might have regulatory obligations.

2049.news: How does MiCA compare to what's happening in the US?

Sofia Andersson: Night and day. The US still regulates by enforcement — no comprehensive framework, just SEC and CFTC actions that create precedent case by case. Companies operate in uncertainty, waiting to see who gets sued next.

Europe chose the opposite approach. Comprehensive rules upfront. Heavy compliance burden, but at least you know what the rules are.

Which is better? For established companies with compliance resources, Europe is more attractive — clear rules enable long-term planning. For startups and experimenters, the US still offers more room to build before regulators catch up.

We're running a natural experiment. In 5 years, we'll see which approach produced better outcomes.

2049.news: What should crypto founders know if they're considering EU expansion?

Sofia Andersson: Three things.

First, start the licensing process early. It takes 6-12 months minimum. National regulators are overwhelmed with applications. If you want to operate in 2025, you should have applied in 2024.

Second, substance matters. MiCA requires actual operations in the EU — offices, employees, decision-making. You can't just register a shell company in Lithuania and serve European customers remotely. Regulators check.

Third, pick your jurisdiction carefully. All MiCA licenses passport across the EU, but each national regulator interprets requirements slightly differently. France is strict but thorough. Germany is slow but respected. Ireland and Netherlands have become hubs for crypto licensing. Do your research on which regulator fits your business model.

2049.news: Final thoughts on where EU crypto regulation goes from here?

Sofia Andersson: MiCA was version one. It addressed the obvious things — exchanges, stablecoins, token issuance. But crypto keeps evolving.

NFTs are largely outside MiCA unless they're financial instruments in disguise. DeFi remains unaddressed. Crypto lending has minimal coverage. These gaps will be filled.

I expect MiCA revisions within 3 years. The framework will expand to cover more activities, with more prescriptive requirements. Whether that's good depends on your perspective. Clarity helps institutions deploy capital. Complexity prevents startups from forming.

Europe made its choice: regulated markets over permissionless innovation. The consequences of that choice are still unfolding.

Sofia Andersson advises crypto companies on European regulatory strategy. She spent 8 years at the European Banking Authority developing digital asset policy and holds law degrees from Uppsala University and the London School of Economics.