Trade Republic Secures Comprehensive Cryptocurrency Service License in Germany Under MiCA Regulations

Trade Republic, the prominent German fintech company, has successfully secured a comprehensive cryptocurrency service license from Germany's financial regulatory authority, BaFin. As reported by Cryptopolitan on October 18, this milestone makes Trade Republic the latest entity to acquire a license under the European Union’s Markets in Crypto-Assets (MiCA) regulatory framework. MiCA aims to establish cohesive governance for digital assets across the EU.

With BaFin's approval, Trade Republic is now authorized to provide an array of cryptocurrency-related services, including the custody of digital assets, execution of orders, order reception and transmission, and crypto transfers on behalf of its clients. This licensing allows the company to offer these services across 30 countries within the European Economic Area (EEA), though it will continue to rely on external trading platforms and market makers for trade execution.

Patrick Hansen, Senior Advisor for EU Strategy and Policy, commented on X (formerly Twitter) that this license acquisition highlights the proactive compliance efforts of financial institutions ahead of MiCA’s full implementation. "Fintechs, neobanks, brokers, and traditional financial firms are competing for MiCA licenses," he observed.

MiCA Licensing Scrutiny in Europe

During MiCA’s transitional phase, which extends until July 2026, cryptocurrency firms can operate temporarily without a license. However, companies that fail to apply for licensing during this period risk halting their operations. Trade Republic, serving over eight million clients and managing assets exceeding €100 billion, has distinguished itself as a leading European online broker. Earlier this year, the company expanded its services to Italy, further increasing its market presence.

To date, BaFin has granted MiCA licenses to 25 companies, with Germany leading Europe with nine (36%) approvals. Notable MiCA-approved firms include Circle, the issuer of the USDC stablecoin, OKX, BitGo Europe, MoonPay, Hidden Road, Socios.com, and BitStaete. Recently, Hidden Road enhanced its European market presence following its acquisition by Ripple.

Impact of MiCA on Europe’s Cryptocurrency Market

Major cryptocurrency players like Binance, Kraken, Robinhood, and Tether have yet to secure MiCA licenses. Although most are in the process of applying, failure to obtain regulatory approval could force them to exit the European market. Tether, in particular, has publicly criticized MiCA's requirements for the USDT stablecoin and has chosen not to apply for licensing. Consequently, platforms complying with MiCA have already begun restricting USDT trading within the region.

European crypto startups are also anticipated to face substantial challenges in meeting MiCA’s rigorous requirements. Ilja Nikiforov, a cryptocurrency-focused lawyer, predicted that up to 75% of crypto firms in Europe could lose their registration by mid-2025 if they fail to obtain a MiCA license. Nikiforov also noted that investments in European crypto startups have dropped by over 90% from their peak in 2022.