MiCA's Final Deadline Nears, and Binance Still Has No License

TL;DR

• On July 1st, the comprehensive MiCA framework reaches its final deadline, the last date for all member states, set by the EU.

• Many major players already comply and have gotten licensed, but the world's largest exchange, Binance, is a notable holdout.

• Binance applied for a license in Greece early this year but withdrew it as reports said it was going to get rejected.

On July 1st, the comprehensive MiCA framework for crypto in the EU reaches its final deadline. The framework covers exchanges, stablecoins and custodians across all 27 member states and is the largest and most comprehensive in the world. Member states have had their own say in when to switch the full rule set on but 1st of July is the last date for all member states, set by the EU.

New entrants have already had to follow the rules for a year and a half but existing businesses have had some time to adjust. Many major players already comply with the rules and have gotten licensed, such as Coinbase, Kraken, Circle and Gemini. 

The stablecoin rules arrived in June of 2024 and covers both e-money (such as pegged currencies) and asset backed ones. Licenses for these have been very few, and the EU are now considering opening up that rule set.

Then, in December of 2024, the exchange rules came. Existing operators, licensed in a member state under its rules, were given a grandfathering period, which is expiring on July 1st. However, it was up to the member states if they wanted to set an earlier date, and many did. Getting licensed in one country allows a company to operate in the entire union.

Binance Is the Notable Holdout

One notable holdout for getting a license is the world's largest exchange - Binance. They applied for a license in Greece early this year but the exchange withdrew their application as reports said it was going to get rejected. The exchange now says it will apply for a license in another country but the July 1 deadline seems tight and Binance says it expects approval in the coming months.

However, being unlicensed after July 1st doesn’t mean a midnight shutdown. Funds will stay accessible and safe but some features will be unavailable to residents in the EU. Some countries have harder lines on crypto activities and residents in those countries will experience an even lesser service.

A few things remain to be seen. How hard will local regulators enforce these new rules? How much will users of unlicensed service providers miss out on? These are questions that will have no clear answer until we see them in action.