MiCA Regulatory Trap: Most European Stablecoin Issuers Locked Out of Custody Services

The Authorization Divide

According to the European Securities and Markets Authority’s interim register, approximately 23 companies have received authorization to issue electronic money tokens across the European Economic Area. However, this figure masks a critical bottleneck: of those 23 issuers, only nine have obtained the dual authorization required to both issue stablecoins and provide custodial services to clients.

This leaves 14 issuers trapped in a regulatory catch-22. They can launch and maintain stablecoins, but they are explicitly forbidden from holding those tokens in custody on behalf of clients or processing automated transactions for corporate users. The restriction represents a fundamental limitation on service offerings, preventing these companies from competing effectively for institutional capital.

The impact on retail users has been negligible. Consumers holding euro-denominated stablecoins continue to transfer tokens freely between personal, non-custodial wallets without any regulatory friction. The true pain has concentrated in the business-to-business segment, where enterprise clients require custody infrastructure and settlement capabilities as core components of their treasury operations.

Strategic Winners Emerge

Circle, the issuer of USDC and EURC, and Société Générale-Forge have emerged as the principal beneficiaries of this regulatory fragmentation. With comprehensive authorization already in place, both firms are positioned to capture institutional capital flows across the European Economic Area during an extended period when rivals lack equivalent licensing.

Circle’s Head of EU Strategy and Policy, Patrick Hansen, expressed surprise that competitors had not better anticipated or prepared for MiCA’s authorization requirements, underscoring how the regulatory shock has concentrated advantage among early movers with complete licenses.

Faced with authorization procedures that can consume six months to a year under MiCA’s Article 60 notification protocols—particularly in major financial hubs like France and Luxembourg—locked-out issuers have pursued creative workarounds. Rather than enduring lengthy compliance timelines, many have begun integrating with licensed platforms or leveraging existing blockchain infrastructure managed by compliant operators.

The XRP Ledger Solution

A prominent example is EURØP, a euro-based stablecoin from French issuer Schuman Financial. Although EURØP holds formal electronic money token authorization, it lacks independent CASP licensing. The project has resolved this constraint by deploying natively on the XRP Ledger blockchain and utilizing Ripple’s pre-existing MiCA-compliant CASP and European Money Institution credentials.

Through this arrangement, Ripple’s established licenses enable EURØP to legally custody tokens and facilitate transfers across 30 European Union member states—converting XRP Ledger’s infrastructure into a critical regulatory compliance layer for European stablecoin operations.

These forced partnerships between issuers and licensed operators are expected to persist for several months to a year while Article 60 notification procedures complete. Market participants anticipate this competitive advantage window will remain in place until the next wave of dual-licensed issuers completes MiCA authorization, reshaping how European stablecoin infrastructure develops.

MiCA’s unintended consequence—cementing infrastructure advantages for early movers—demonstrates how regulatory implementation can reshape competitive terrain in digital asset markets, even as it creates opportunities for innovative blockchain solutions like the XRP Ledger to become essential infrastructure for European fintech compliance.

Source: ESMA, via U.Today. Not financial advice.