The digital asset landscape is changing — and banks are no longer on the sidelines.
With the Markets in Crypto-Assets (MiCA) regulation taking shape across the EU, traditional financial institutions must now grapple with the same expectations of transparency, accountability, and compliance as crypto-native players. For banks and neobanks expanding their digital asset services, MiCA is not just a regulatory hurdle—it’s a roadmap to trust, growth, and institutional credibility.

What is MiCA?

MiCA is the EU’s first comprehensive regulatory framework for crypto-assets. Designed to harmonize rules across member states, it focuses on ensuring consumer protection, market integrity, and financial stability in digital asset markets.

MiCA timeline (as of April 2025):

• 9 June 2023 – Published in the Official Journal.  Entered into force in June 2023.
• June 2024 – Title III & IV provisions on stablecoins and e-money tokens began applying.
• December 2024 – Full MiCA compliance required for all Crypto Asset Service Providers (CASPs), including banks offering custody, trading, or advisory services involving crypto.
• 1 July 2026 – Deadline for late application- any CASP legally providing crypto services in a Member State prior to 30 Dec 2024 can continue operating under national rules until it obtains a MiCA authorization, provided it applies by 1 July 2026 at the latest.

Why does it matter for banks?

While much of the regulatory focus has historically been on exchanges and crypto-native startups, traditional banks are increasingly in scope—especially as they begin offering custody, trading, or tokenized asset services.

Banks may not always consider themselves crypto asset service providers (CASPs), but under MiCA, activities like safekeeping private keys, executing crypto orders, or enabling access to trading platforms fall within the regulatory perimeter. As the EU moves to harmonize the treatment of crypto-assets across all providers, banks will need to meet the same transparency, reporting, and governance standards as crypto native businesses like exchanges.

Whether launching digital asset services in-house or via partnerships, banks offering crypto-related activities will be treated as CASPs under MiCA.

Key reasons why banks must prepare:

• Regulatory parity: MiCA removes the grey zone. Offering crypto without meeting MiCA standards risks penalties and enforcement.
  
  
• Rising consumer demand: Clients expect both crypto access and the security and trust often associated with traditional banking.
  
  
• Future-proof infrastructure : Building controls for crypto now also prepares treasury and ops teams for tokenised securities and on-chain collateral that will likely follow.

MiCA doesn’t distinguish between crypto-native firms and banks. If you offer regulated digital asset services, you're in scope — and expected to comply accordingly.

Key MiCA requirements for banks

MiCA introduces a structured compliance framework, but many of its requirements rely on interpretation by national regulators—making adaptability critical.

Here are the major areas where banks must prepare:

Authorization & registration

Before offering crypto services, CASPs must obtain CASP authorization from their national competent authority (NCA). This includes submitting governance documentation, operational workflows, internal controls, and evidence of robust compliance capabilities.

That said, banks and certain other financial entities (investment firms, e-money institutions, etc.) can sometimes leverage their existing licenses to provide crypto services by notifying their regulator instead of undergoing a full new CASP authorization (Article 60).

Capital adequacy

Under MiCA, banks aren’t subject to the same capital requirements as non-bank crypto providers, since they're already covered by strict banking rules (CRR/CRD).

• Non-bank CASPs must meet MiCA’s defined capital thresholds (the greater of €50k–€150k depending on operation class or 25% of the firm’s annual fixed overhead costs) to get licensed (Article 67).

Banks can offer crypto services without holding extra MiCA-specific capital (Article 60), but must still assess and cover crypto risks under existing frameworks. Banks are still expected to maintain sufficient capital for crypto risks, especially given global guidance that treats unbacked crypto as high-risk, but CRR/CRD capital rules are typically considered sufficient protection for their crypto activities.

Client asset segregation

Banks offering custody services are expected to implement wallet architecture that supports segregation. This often involves using distinct blockchain addresses or sub-accounts for client holdings versus the bank’s treasury holdings, or maintaining robust on-chain tagging and off-chain bookkeeping to delineate ownership. MiCA does not prescribe the technical method, but the arrangements must be sufficient to ensure clear ownership.

MiCA mandates strict segregation of client-held crypto-assets from the firm’s proprietary holdings, both technically and legally. This applies to hot and cold wallet structures.

Example: Each client’s on-chain assets must be independently identifiable, with sub-ledgers reflecting balances that can be reconciled against on-chain data.

Record keeping & periodic reporting

Banks must maintain detailed, immutable records for a period of 5 years (or up to 7, where requested by a NCA prior to 5 years being elapsed- Article 68 section 9) of:

• All crypto transactions, activities, services and orders
• Wallet balances (internal & external)
• Reconciliation logs
• Communications and complaints
• Governance and compliance records

While daily reconciliation is considered best practice, it’s not always externally mandated. Regulators will expect periodic reports on financial condition, exposure, and safeguarding—formats and frequency subject to supervisory guidance.

Risk management & internal governance

MiCA requires comprehensive internal controls across:

• Operational risk: such as procedures for managing system outages, transaction errors, wallet malfunctions, and other operational incidents.
  
  
• Custody controls: a formal custody policy must be in place to prevent loss or theft of crypto assets/keys, with defined processes for key generation, storage (e.g. use of HSMs or multi-signature wallets), and transaction authorization.
• Market abuse prevention (including insider trading): CASPs are required to “detect and prevent” market abuse through appropriate systems.
  
  

Whitepaper for issuance of crypto-assets:

If a bank (or any entity) issues a crypto-asset or offers one to the public, MiCA requires a crypto-asset white paper that includes detailed information about the project, underlying technology, risks, rights of investors, and costs/fees associated with the asset.

For example, if a bank were to issue its own stablecoin or tokenized deposit, it would need to publish a MiCA-compliant whitepaper disclosing all relevant risks (volatility, tech risk, governance, etc.) and any fees. 

AML & CTF compliance

Any MiCA-regulated activity must meet EU Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CTF) standards, including:

• Customer due diligence (CDD): banks must conduct full KYC on customers using crypto services, verifying identity, assessing the purpose of accounts, and understanding the source of funds/wealth as appropriate.
  
  
• Transaction monitoring: banks are expected to implement systems to monitor crypto transactions for red flags such as structuring (smurfing), sudden large movements, or transfers involving known suspicious addresses.
  
  
• Suspicious activity reporting: as with any financial activity, if a bank detects signs of money laundering or terrorist financing in its crypto business, it must file suspicious transaction reports with the national Financial Intelligence Unit (FIU).
  
  
• Exception to the typical travel rule: alongside MiCA, the EU approved revisions to the Transfer of Funds Regulation (TFR) which require that originator and beneficiary information accompany all crypto-asset transfers between CASPs, regardless of amount​. This goes beyond the FATF’s recommendation (which set a €1000 threshold)

Challenges and opportunities for banks

Key challenges

• Data fragmentation: banks must reconcile on-chain and off-chain records across siloed systems.
  
  
• Legacy infrastructure: traditional core banking systems weren't designed to ingest and classify crypto data.
  
  
• Unclear guidance: many MiCA requirements are still subject to interpretation by national regulators, particularly around reporting formats and timelines.
  
  

Opportunities

• Client trust: MiCA compliance signals safety, professionalism, and transparency, helping differentiate credible institutions from riskier players in the crypto space.
  
  
• New services: token custody, stablecoin integration, and crypto investment services are easier to pursue within a clear legal framework.
  
  
• Regulatory advantage: early movers can help shape best practices and build lasting relationships with regulators, establishing market leadership.
  
  

Cryptio -  helping banks operationalize MiCA compliance

Cryptio is an enterprise-grade crypto back-office platform built to meet the demands of MiCA (and other major regulatory frameworks such as ADGM, VARA, PSA and FCA) for data integrity, transparency, and reporting.

Real-time, auditable accounting

Cryptio transforms on-and-off-chain activity into structured journal entries and audit-ready records:

• Classifies transactions (trades, transfers, fees, disposals) based on MiCA-aligned taxonomies
  
  
• Reconciles wallet balances daily or in real time, between internal systems and on-chain data
  
  
• Maintains immutable audit trails and downloadable reports

Banks can export general ledger-ready reports compatible with SAP, Oracle Netsuite, and other ERP systems.

Integrated risk & compliance frameworks

• Client asset tagging for instant segregation of customer vs corporate funds in omnibus wallet structures
  
  
• Reconciliation engine for continuous monitoring of wallet and exchange balances, at the balance or transactional level

Cryptio’s audit trails and reports support evidence generation for regulatory submissions.

Seamless system integration

Cryptio integrates with custody solutions, trading platforms, and general ledger systems—offering both APIs and no-code options to reduce onboarding time and implementation costs.

Banks don’t need to rip and replace core infrastructure. Cryptio becomes the crypto compliance layer between their digital asset services and regulators.

Turn compliance into confidence

MiCA may raise the bar—but for banks with the right infrastructure, it also levels the playing field. With a platform like Cryptio, banks can go beyond reactive compliance to build secure, scalable, and regulator-ready digital asset offerings.

Join leading institutions like Circle and Gemini, who already trust Cryptio to power audit-ready, MiCA-compliant crypto operations.

See how Cryptio can reduce your MiCA compliance burden—book a demo today.