Excess MiCA regulation in the EU could stifle Portuguese fintech innovation

The MiCA crypto assets regulation, which came into force at the end of 2024, does bring more security for investors but could limit innovation in the financial system and push small Portuguese fintechs out of the market.

MiCA (Markets in Crypto-Assets Regulation) came into force with the aim of bringing greater security to investors and consumers – more rules that experts in the sector believe may hinder innovation in the financial system in Europe.

“In an unregulated environment, innovation develops faster, but the likelihood of fraud also exists. It makes the potential market smaller. With regulated activity, the rules of the game are known”, said Pedro Jordão, managing director of parity digital assets at Parfin, at the 5th edition of the New Money – New Wave of Digital Money Conference, organized by ECO and Morais Leitão on Tuesday (May 20). “But Europe regulates a lot and innovates little,” he added.

“The ‘original sin’ that gave rise to MiCA was not so much the mitigation of fraud. It was the fear of the appearance of Libra (On Facebook) that created intense concern in Brussels regarding that could become a severe disruption in the European payments system”, said João Matos Cruz, Vice President of ANIPE. (The National Association of Payments and Electronic Money Institutions)

“Europe looks only at what is its strong point, which is regulation. We regulate before we do”, stressed João Matos Cruz. “MiCA only came into full force in January this year. Two weeks ago, there were 58 regulatory instruments associated with this regulation. Today there were 62,” he added.