The EU’s Markets in Crypto-Assets Regulation (MiCA) introduces a transitional period — often referred to as the “grandfathering” regime — to allow existing crypto service providers time to adapt. But what exactly happens when this period ends in July 2026?

This article explains the purpose of the grandfathering period, who it applies to, and what crypto businesses must do before the deadline to remain compliant.

What Is the MiCA Grandfathering Period?

The grandfathering period is a transitional window that allows crypto-asset service providers (CASPs) already operating in certain EU Member States to continue doing business without a MiCA license for a limited time.

Under Article 143(3) of MiCA, Member States may choose to allow existing CASPs to operate until 1 July 2026, provided they were authorized under national regimes before 30 December 2024.

This period gives firms time to prepare their MiCA-compliant license application while continuing to serve clients legally.

Who Qualifies for Grandfathering?

To benefit from the transitional regime, a firm must:

• Be established in an EU Member State
• Already provide crypto-asset services under a national license or registration (e.g., under a local AML regime)
• Be recognized by the local competent authority as qualifying for transitional status
  
  

Note: Not all Member States will offer grandfathering. Firms must verify with their local regulator whether this transitional path is available.

What Happens After July 2026?

Once the grandfathering period ends:

• All EU-based CASPs must hold a valid MiCA license to continue operating
• Firms without a license will have to cease operations or risk regulatory enforcement, including fines and legal action
• Non-compliant entities may be blacklisted, and clients may be forced to withdraw assets or terminate services
  
  

There are no further extensions beyond July 2026. Firms must either be fully licensed or shut down crypto-asset services within the EU.

Can You Continue Without a License After That?

That depends on your business structure and location:

• If your company is incorporated in the EU, you must have a CASP license after the grandfathering period ends — even if you serve only non-EU clients.
• If your company is based outside the EU and does not target EU clients in any way, you may continue to operate without a CASP license.
• If you’re a non-EU firm that markets to or serves EU clients, then you must establish an EU presence and obtain a license to remain compliant.
  
  

What Should Firms Do Before the Deadline?

1. Review your current status
   Determine whether you qualify for grandfathering in your Member State.
2. Start preparing your CASP application
   The authorization process involves substantial documentation on governance, AML/CFT, ICT systems, and operational procedures.
3. Decide on your long-term strategy
   Evaluate whether to remain in the EU under MiCA, restructure operations abroad, or discontinue regulated services.
4. Monitor local regulatory updates
   Each EU country may issue specific guidance or timelines for firms seeking to transition into the MiCA framework.
   
   

Conclusion

The MiCA grandfathering regime offers a valuable runway for crypto firms operating in the EU — but it ends decisively in July 2026. After that, there is no legal room to maneuver: you’re either licensed or you’re out.

If your firm intends to continue serving the EU market, the time to act is now. Begin preparing your CASP license application and align your operations with MiCA’s standards to ensure a smooth transition.