As part of our ongoing expert series on global crypto legal regimes, we analyze and evaluate different regulatory approaches for digital assets. This article explores how regulators in the Netherlands were preparing for the EU’s MiCA regulation, where the new rules now bring regulatory certainty to a domestic market previously renowned for being crypto-friendly.
As the implementation date for MiCA has approached at the end of 2024, each EU member state is now required to set up a process for crypto-asset service providers (CASPs) to undergo the appropriate notification or licensing requirements within the defined transition period.
2025 context – a crypto-friendly legacy
Even in the absence of any concrete regulations governing digital assets, the Netherlands has historically been perceived as a crypto-friendly jurisdiction. Since around 2020, crypto-assets have been included in the Dutch interpretation of the EU’s Fifth Anti-Money Laundering Directive.
The Dutch Money Laundering and Anti-Terrorist Financing Act (Wwft) includes definitions of “custodian wallet providers” and “providers engaged in exchange services between virtual currencies and fiat currencies,” requiring that providers meeting these definitions register with the Dutch Central Bank (DNB.)
Furthermore, if a crypto-asset is deemed to qualify as a traditional financial instrument, such as securities or electronic money, the Dutch Financial Supervisory Act (FSA) will apply. Financial instruments are regulated by the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten, AFM), while the DNB is responsible for crypto-assets qualifying as electronic money.
As of late 2024, over 40 entities have been registered with the DNB as crypto-asset service providers.
Overview of MiCA transition and timeline
While the DNB has held responsibility for registering CASPs pre-MiCA, the AFM is responsible for issuing CASP licenses to providers in the Netherlands since MiCA came into force. To that end, the AFM has been receiving MiCA licensing applications from CASPs since April 22, 2024. Once approved, licenses are effective from December 30, 2024.
The AFM has also issued comprehensive guidance for CASP applications, including a detailed procedure and timeline. The license application process is anticipated to take around five months, depending on the speed of communication between applicant and AFM.
The AFM is operating a six-month transitional period that will end on June 30 2025, substantially shorter than the 18-month transitional period permitted under MiCA. All Dutch CASPs and EU CASPs in non-Netherlands countries wishing to provide services to Dutch users will need to have their MiCA license in place by this date.
Under the current DNB rules, all CASPs are required to register regardless of their size or existing financial operations. As such, a bank launching crypto-asset services in the Netherlands has been subject to the same registration requirements as a brand-new crypto exchange operator.
Since MiCA came into force at the end of 2024, Article 60 exempts “certain financial entities” from the requirement to obtain a CASP license from their domestic regulator. Regulated credit institutions, securities depositories, investment firms, and others already licensed or regulated under established EU financial regulations will follow a simplified notification procedure that allows them to extend existing operations to digital assets.
Qualifying entities must notify the regulator at least 40 days in advance of launching CASP operations.
Notification procedure for qualifying institutions
While MiCA stipulates a statutory notification period of 40 days, the AFM clarifies that the statutory period only begins once a “complete” notification has been submitted, which satisfies the notification requirements. Therefore, the AFM allows for a “completeness check” to occur before the statutory notification period starts.
The AFM confirms that any clarifying questions or discussions regarding complete notifications will not delay the statutory timeline. However, qualifying institutions are not permitted to launch CASP operations until the AFM has confirmed a complete notification has been filed.
CASP licensing
Entities that do not qualify for an Article 60 exemption, which includes crypto-native exchanges and brokers, will be required to obtain a full CASP license. The AFM has issued detailed information and an application portal for applicants, including a procedure and timeline, which anticipates a five-month process.
The AFM also offers the option of a CASP pre-scan, which could make the licensing application process more efficient by facilitating the early exchange of information between CASP applicants and the AFM. However, pre-scanning does not constitute any kind of formal application, and the AFM only commits to providing feedback on a general level.
Operational executives and board members will be assessed for their suitability under existing AFM rules.
All forms and procedural documents, along with best practice guidelines for applicants, can be found on the AFM website.
Transitional arrangements for existing CASPs
Thus far, the AFM has not communicated any simplified or modified licensing procedures for CASPs that have already been registered with the DNB using the registration procedure in place since 2020.
Therefore, existing CASPs must undergo the same licensing application as new CASPs and will be assessed in the same way. However, under the provisions of MiCA, existing registered CASPs should be able to continue operating in the Netherlands during the transition period that runs up to June 30, 2025, based on their existing registration.
However, a key benefit of obtaining a MiCA license is the portability it offers among all 27 EU member states. This portability only applies from the point the MiCA license is granted and doesn’t cover companies in transition from any existing regime. Due to this, and in light of the relatively short six-month Dutch transition period, CASPs are advised to apply for their MiCA license as soon as possible.
Market opportunity for CASPs
As a relatively crypto-friendly jurisdiction, the Netherlands is already home to a thriving market of digital asset providers with an established and growing base of users in the country. The DNB estimates that by mid-2022, around 14% of the population already held cryptocurrencies, while Statista projects that this will increase to nearly 32% by early 2025.
Due to the lack of clear regulatory certainty, Dutch banks have so far proven reluctant to step into crypto-asset service provision. As such, the CASP landscape is currently dominated by crypto-native providers, many of which are now gearing up for a newly competitive market under MiCA. For instance, in September 2024, leading crypto exchange Kraken acquired local broker Coin Meester (BCM) in a bid to establish a footing in the Dutch market.
In November 2024, stablecoin giant Tether announced an investment in Dutch fintech firm Quantoz to support the latter with the issuance of two new MiCA-compliant stablecoins.
These developments underscore the potential opportunity available to established banks and brokers wishing to branch out into digital asset services in the Netherlands, many of which will be able to take advantage of the Article 60 exemption to facilitate a rapid entry to the market.
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 MiCA-compliant digital asset offering in your organization.
Please note that the above article does not constitute legal advice.