Ireland a Prime Destination for Crypto Asset Service Providers in 2025
Ireland’s Appeal to Crypto-Asset Service Providers in 2025
The Regulation (EU) 2023/1114 on Markets in Crypto-Assets, or MiCA, seeks to regulate and provide oversight to the crypto asset industry. This regulatory framework was published in the Official Journal of the European Union in June 2023. It came into effect for issuers of asset referenced tokens and electronic money tokens in June 2024 and fully covered providers of crypto asset services by 30 December 2024.
MiCA aims to bring transparency, investor protection, and financial stability to the crypto asset market. It sets out uniform standards for the offering and trading of crypto-assets and for crypto asset service providers (CASPs). These standards include requirements for transparency, disclosure, authorization, supervision, and protection of crypto asset holders and CASP clients. MiCA also includes measures to prevent market abuse, such as insider dealing or market manipulation.
Under MiCA, CASPs are required to obtain authorization from a competent authority before offering crypto asset services in the European Union. In Ireland, this means that entities wishing to provide such services must apply to the Central Bank of Ireland for authorization as a CASP.
MiCA has impacted the existing Virtual Asset Service Provider (VASP) regime in Ireland. Prior to MiCA, providers of virtual asset services were required to register with the Central Bank of Ireland for Anti-Money Laundering and Counter-Terrorist Financing obligations. MiCA establishes a more comprehensive regulatory framework than the previous VASP regime. Entities offering virtual or crypto asset services after 30 December 2024 need authorization as a CASP. The Central Bank of Ireland has cautioned that holding VASP authorization does not guarantee success in obtaining CASP authorization.
Existing VASPs in Ireland have a transitional period where they must apply for CASP authorization to offer services in other jurisdictions. There is no streamlined authorization process for VASPs transitioning to CASPs. If a VASP’s CASP authorization is denied, they must cease regulated activities upon notification.
MiCA regulates different types of crypto-assets, including electronic money tokens (EMTs), asset-referenced tokens (ARTs), and other crypto-assets like utility tokens. Requirements for EMTs and ARTs aim to ensure financial stability. MiCA does not cover unique crypto-assets like non-fungible tokens (NFTs) or those classified as financial instruments under MiFID II.
Crypto asset services encompass a range of activities such as custody, trading platforms, exchange, and advice related to crypto-assets. Entities offering these services must adhere to MiCA regulations.
Firms in the crypto asset sector choose to be authorized in Ireland due to various advantages. Ireland boasts a strong regulatory framework overseen by an experienced regulator, the Central Bank of Ireland. Its Innovation Hub promotes innovation in the financial sector. Additionally, Ireland offers a competitive tax regime, with a standard 12.5% corporate tax rate, making it an attractive location for crypto asset service providers looking to establish a presence in the region.