Passporting rights allow a financial firm authorized in one European Economic Area (EEA) member state to conduct business in other EEA states without requiring additional local authorizations. This mechanism facilitates the free provision of services and the freedom of establishment across the single market. It significantly reduces administrative burdens and promotes competition among financial service providers. These rights are fundamental to the EU’s financial integration.
Context
The application of passporting rights to crypto asset service providers is a central discussion point under the European Union’s Markets in Crypto-Assets (MiCA) regulation. Once MiCA is fully implemented, licensed CASPs in one EU member state will generally be able to offer their services across the entire bloc. This extension of passporting principles to digital assets represents a significant step towards a unified European crypto market, potentially altering operational strategies for many firms.
MiCAR's implementation prompts strategic licensing applications, establishing a harmonized compliance pathway for crypto asset service providers across the EEA.
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