In this article, we explore the transition to the EU’s new MiCA regulation in Portugal, where delays in the domestic legislative process have suspended the implementation of the new CASP licensing regime.
2024 Context
In the past, there have been no specific laws governing crypto-assets in Portugal. As with many EU member states, the government opted to extend the provisions of the Fifth Anti-money Laundering Directive to cover crypto-assets and CASPs. Therefore, since 2018, providers have been required to register their activities with the Bank of Portugal.
The government also reserved the right to regulate specific digital assets if they demonstrated characteristics similar to those of financial or payment instruments. However, this supervision was determined on a case-by-case basis by the relevant supervisory authority – either the Portuguese Securities Exchange Commission (CMVM) or the Bank of Portugal.
Even with a lack of regulatory certainty, Portugal has gained a reputation as a crypto-friendly country due to some highly favorable tax policies regarding digital assets, which were at one point entirely tax-free. Although the rules tightened somewhat in 2023, crypto-asset taxation is still relatively low compared to many other EU member states.
As of early 2025, seven companies are registered as CASPs with the Bank of Portugal, including the Brazilian exchange giant Mercado Bitcoin branch.
Overview of MiCA Procedure and Timeline
MiCA takes the form of an EU regulation, meaning that once it enters into force, it is directly applicable to all member states without requiring the states to pass domestic enacting laws. Therefore, MiCA has already been effective in Portuguese law since the last part of the regulation governing CASPs became effective on 30th December 2024.
However, a key requirement of the regulation is that each country appoints a competent domestic authority to supervise CASPs and issue CASP licenses.
On 3rd January 2025, the Bank of Portugal issued a press release to confirm that the Portuguese government had not yet appointed either the Bank of Portugal or the CMVM as a competent authority for supervising and licensing CASPs. As of February 2025, this remains the case.
In its capacity of the existing supervisor of CASPs under Portuguese law, the Bank also provided guidance regarding transitional arrangements for CASPs. However, it clarified that it had not been bestowed with the necessary legal powers to undertake licensing applications for CASPs.
Even so, the requirements for compliance with MiCA are well defined by the regulation itself, and already in various stages of implementation elsewhere in the bloc. Therefore, Portuguese CASPs can be prepared for when the regulator is eventually appointed.
Since the MiCA license is portable throughout all 27 EU member states, any firms with entities in other EU member states can also leverage their position to obtain a CASP license abroad for servicing Portuguese users.
Notification procedure
Certain financial entities already regulated under EU laws may benefit from an exemption from the full CASP licensing procedure under Article 60 of MiCA. Regulated credit institutions, securities depositories, investment firms, and electronic monetary institutions are among those that do not need to obtain a CASP license but must follow a simplified notification procedure to enable them to provide equivalent digital asset services under their existing license.
According to Article 60, qualifying entities must notify their domestic regulator at least 40 days in advance of beginning CASP operations. However, Portuguese institutions must wait until the competent authority is appointed as regulator before they can issue their notification.
Licensing for new CASPs
Due to the lack of an appointed regulator, it’s also not possible to apply for a full CASP license in Portugal. Even so, CASPs wanting to prepare may use the generic data collection templates and application for authorization provided by ESMA in its Final Report on Draft Technical Standards for the implementation of MiCA. Doing so will ensure readiness once the regulator is appointed.
Transitional Arrangements for Existing CASPs
Transitional arrangements for CASPs were clarified by the press release issued by the Bank of Portugal on 3rd January 2025, following the final implementation of MiCA. Any entity registered with the Bank of Portugal as a CASP before 30th December 2024 can continue to operate under its existing registration. The press release does not stipulate the length of the transitional period in place, but in the absence of any domestic ruling, MiCA allows for a transitional period of 18 months, up to the latest 30th June 2026.
Market Outlook
Portugal shows many indicators of a favorable outlook for digital assets, with a relatively young, urbanized population in which 75 percent are interested in learning more about cryptocurrencies and related technologies. Twelve percent of the population reportedly owns cryptocurrencies, with the country ranked fourteenth on a global Crypto Adoption Index published by Henley & Partners.
Although adoption by Portuguese institutions has been relatively slow due to the previously ambiguous regulatory status of digital assets, there are also positive signs that the financial sector is beginning to explore opportunities. Ripple recently announced a partnership with local currency exchange service Unicâmbio to bring crypto-enabled cross-border payments between Portugal and Brazil, another key market for regulated digital asset adoption.
Launching a MiCA-compliant CASP Offering with Wyden
Wyden Infinity covers the entire end-to-end trade lifecycle of digital assets across all pre-trade, trade, and post-trade use cases. It enables sell-side firms to build and maintain retail and institutional client offerings as well as internal prop-trading needs via a single platform, making Wyden Infinity the ideal choice for banks and brokers when building and scaling their fully MiCA-compliant digital asset businesses.
A key advantage of the Wyden platform is that it offers true best execution through market-wide connectivity to over 55 trading venues and a smart order routing system that carries out price comparisons and order splitting to achieve the optimal execution terms. Transparency is built into the system via real-time pre- and post-trade data, and Wyden’s standalone accounting system offers a fully auditable transaction trail.
Integration with custody partners, such as Copper, Metaco, and Fireblocks, also means Wyden maintains an auditable record of transaction flows between custody and trading with automated liquidity management solutions that ensure an uninterrupted trading experience. Core banking integrations ensure smooth reconciliation and support the assimilation of a new digital asset offering into established workflows.
Contact us today for an initial discussion about implementing a compliant digital asset offering in your organization.
Please note that the above article does not constitute legal advice.