EU CryptoReg Roundup: December 2025

This update is brought to you by our Regulatory & Risk Advisory practice group in Ireland. 

Our aim is to keep you informed of the fast-evolving legal landscape, from new legislation and guidance to significant case law and observations.

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Key developments this month include:

• EU Market Integration Package: The Commission's legislative proposals on market integration with key proposals on centralised CASP authorisation and supervision and amending the regulatory framework for DLT assets.
• MiCAR transitional measures / Q&A: ESMA statement on MiCAR transitional measures and Q&A on the scope of the term “trading platform for crypto-assets” under MiCAR.
• Central Bank of Ireland Regulatory Roadmap: Roadmap to deliver a more effective and efficient regulatory framework, including regarding the simplification agenda.
• Digital Euro: Council agrees its negotiating position on the digital euro.

On 29 December 2025, the transitional period for virtual asset service providers registered and operating in Ireland to continue to operate until their crypto-asset service provider (CASP) authorisation is granted under MiCAR has ended. The Central Bank of Ireland (Central Bank) has authorised ten CASPs under MiCAR during this period. 

Legislation and guidance

Europe

Commission's Market Integration package

4 December 2025 – The European Commission released its legislative proposals on market integration as part of the Savings and Investments Union strategy.

• The package focuses on proposals to remove barriers that fragment the single market, in a number of key market segments including trading, post-trading and asset management, while also driving innovation and enhancing supervision in these areas.
  
  
• The package contains three legislative proposals:
  
  
  
  • Master Regulation (amending existing EU capital market legislation);
  • Master Directive amending the UCITS Directive, AIFMD and MiFID II; and
  • Regulation on settlement finality and amending financial collateral arrangements.

• The Master Regulation proposes to amend MiCAR to transfer the authorisation, monitoring and supervision of all CASPs from national competent authorities (NCAs) to the European Securities and Markets Authority (ESMA).
  
  
• On tokenisation, the proposed Regulation on settlement finality together with proposed amendments to the Central Securities Depository Regulation and the EU DLT Pilot Regulation, aims to remove regulatory barriers to innovation related to distributed ledger technology (DLT) and to encourage the adoption of new technologies in the financial sector.
  
  
• On 4 December 2025, ESMA issued a press release welcoming the Commission’s proposal on market integration and noted that it stands ready to take on the specific responsibilities regarding direct CASP supervision.
  
  
• By way of next steps, the legislative proposals will proceed through the ordinary legislative process. 

ESMA MiCAR materials 

4 December 2025 – ESMA Statement on MiCAR transitional measures.

• With regard to the transitional measures in MiCAR for CASP authorisations, ESMA sets out its expectation that CASPs not yet authorised under MiCAR have implemented orderly wind-down plans for the services they provided in Member States in which the transitional period is over, or alternatively have orderly wind down plans in place ready for implementation ahead of the end of the remaining transitional periods in case they should not be authorised by then.
  
  
• ESMA further reminds NCAs that they are expected to treat “last minute” applications for authorisation under MiCAR with considerable caution and assess their compliance with MiCAR upholding the same standard as for any other, and to be ready to enforce against the unauthorised provision of crypto-asset services.
  
   

8 December 2025 – ESMA Q&A 2711 on the scope of the term “trading platform for crypto-assets” under MiCAR.

• ESMA clarifies in this Q&A that the term “trading platform” used in Article 78(5) of MiCAR should be interpreted as exclusively referring to entities that are authorised in accordance with Article 59 of MiCAR to provide the service of ‘operation of a trading platform for crypto-assets’. ESMA notes that whenever the execution policy of a CASP providing the service of ‘execution of order for crypto-assets on behalf of clients’ provides for the possibility that client orders might be executed outside of MiCAR trading platforms (e.g., OTC venues, third-country trading platforms, decentralised exchanges), such a CASP “shall inform their clients about that possibility and shall obtain the prior express consent of their clients before proceeding to execute their orders outside a trading platform, either in the form of a general agreement or with respect to individual transactions”.

Council agrees position on the digital euro

19 December 2025 – The Council of the EU agreed its negotiating position on key proposals to strengthen the euro currency.

• The proposals relate to two regulations setting out the legal framework for the potential issuance of a digital euro, and a regulation to safeguard the role of cash in the EU.
  
  
• To avoid the digital euro being used as a store of value and any impact on financial stability, the text provides for limits on the total amount of digital euros that can be held on online digital accounts and in digital wallets at any one time. The limits will be set by the European Central Bank (ECB) but must respect an overall ceiling agreed by the Council which will be reviewed at least every two years.
  
  
• With this agreed position, the Council can enter into negotiations with the European Parliament on the digital euro and the legal tender status of cash.

EBA Final Report on updated guidelines on equivalence of confidentiality regimes

22 December 2025 – The European Banking Authority (EBA) publishes a final report containing guidelines updating its 2022 guidelines on the equivalence of confidentiality and professional secrecy regimes of third-country authorities.

• The revised guidelines expand the scope of the original 2022 guidelines to reflect new requirements under MiCAR and incorporate the latest EBA equivalence assessments.
  
  
• MiCAR requires that EU authorities cooperate with authorities from third countries either on a bilateral basis or via supervisory colleges. The confidentiality and professional secrecy regime that is equivalent to that in the EU is often a precondition under EU law for sharing confidential information with third-country supervisory authorities.
  
  
• The guidelines outline common principles for determining third-country equivalence with provisions in MiCAR. However, no such assessments have been performed yet.

Other updates

Ireland

Central Bank publications  

1 December 2025 – Central Bank publishes research paper on retail investor participation in Ireland. 

• This research paper includes data on consumer behaviours in relation to crypto. The survey research indicates 10% of the population own crypto-assets. This increases considerably among the investor population with 30% of surveyed investors indicating they own crypto-assets.
  
  
• It is notable that awareness of crypto-assets is significantly higher than other products with 74% of the general population reporting that they are aware of crypto-assets, compared to 53% for investment funds.
   

• The Governor of the Central Bank, Gabriel Makhlouf, notes that in more recent times, technological developments have facilitated the advancement of what could be considered alternative forms of money, with new digital assets emerging, from tokenised deposits to stablecoins. In principle, different forms of money can coexist serving different use cases. 
  
  
• The Governor further notes that the digital euro would set the standards in the payments ecosystem that preserve public policy objectives, ensure smooth and cost-free cross-border payments across the euro area, provide a rail upon which the private sector could develop value-added and innovative services, and serve as a foundational infrastructure with the anchor of central bank money. The Irish Presidency of the European Council (from July 2026) will likely see a major step in the digital euro’s creation and in the modernisation of Europe’s payment systems.

10 December 2025 - Central Bank publishes roadmap to deliver a more effective and efficient regulatory framework.

• The report outlines how the Central Bank will, in line with initiatives across Europe, enhance the effectiveness and efficiency of its supervision and domestic regulatory framework, improve gatekeeping processes, and deliver a more integrated and less burdensome reporting and data framework.
  
  
• The report includes a roadmap for delivery of the simplification agenda outlining certain key domestic milestones and timelines.
  
  
• The Central Bank notes in the report that in the period ahead, in addition to its focus on being more effective and efficient, it will continue to be more future-focused, which includes adapting with the times, examples include the continued digitalisation of the financial sector, work on the digital euro, the Central Bank's forthcoming discussion paper on tokenisation, and the second Innovation Sandbox.
  
   

• This is the first edition of the Central Bank’s financial crime bulletin (following on from the previous AML bulletin series) and provides an update on crypto and payments. 
  
  
• The Central Bank reminds payment service providers (PSPs) and CASPs of their obligation to have procedures in place to identify those PSPs or CASPs who repeatedly fail to provide the information which must accompany transfer of funds and certain crypto-assets transfers and to report these to the Central Bank.

Europe

EBA publications 

• This report describes the main developments and trends in the EU/EEA banking sector and provides the EBA outlook on the related main risks and vulnerabilities.
  
  
• The report includes a chapter on the interaction between stablecoins and the European banking sector, noting that potential deposit outflows towards EMIs issuing e-money tokens (EMTs) can undermine banks’ liquidity positions and vulnerabilities to liquidity shocks can be exacerbated particularly for those banks that hold EMT issuers’ reserves as they may encounter large outflows linked to EMT redemptions which may destabilise their liquidity position.
  
   

• The EBA published a follow-up to its 2023 peer review report assessing progress in the authorisation of PIs and EMIs under the revised Payment Services Directive (PSD2). While notable improvements and increased convergence have been observed, significant differences persist in key areas such as governance, internal control mechanisms, and local substance.
  
• The review also provided data on the resources allocated by NCAs to the authorisation of PIs and EMIs. Among the NCAs that reported a need for additional resources, several authorities mentioned specifically the interplay between PSD2 and MiCAR, which is expected to further challenge NCAs’ capacity to maintain timely and effective authorisation processes.
  
   

• The SPD sets out the EBA’s planning of activities and corresponding resource requirements for years 2026-2028.
  
  
• In the context of MiCAR, the EBA expects to exercise its supervision activities over some issuers of asset-referenced tokens (ARTs) and EMTs in 2026 and should operate in a steady-state manner over the 2026-2028 period. The EBA will have to determine which of these ART and EMT issuers are significant, supervise those, and issue regular opinions at the request of NCAs on the regulatory classification of crypto-assets. The EBA will further support the European Commission for its reports preparing the MiCAR review.
  
  
• Following the joint EBA-ESMA 2025 report on developments in crypto-asset markets and their analysis of DLT use cases, the EBA will monitor the use of decentralised finance as a means for consumers to access EMTs and ARTs and the wider use of commercial bank-issued tokens as settlement assets. The EBA aims to provide a factsheet on latest trends on the use of tokenised settlement assets by EU banks in Q4 2026.

ESA factsheet on crypto frauds and scams

15 December 2025 – The European Supervisory Authorities publish factsheet on crypto frauds and scams.

• The factsheet covers key warning signs, steps to protect yourself, what to do when one has become a victim of a fraud or scam, and an overview of types of crypto scams. 

• The report aims at describing the state of cross-border investment services in the EU/EEA, with particular focus on the analysis of firms’ retail clients and complaints data.
• Regarding the distribution of retail clients by product type among firms, crypto-assets (regulated under MiCAR) account for nearly 1 million of clients (7%).
• This report considers only credit institutions and investment firms and does not include CASPs. As such, it covers only a portion of the crypto market—specifically, traditional financial actors offering crypto-related products classified as non-financial instruments.