EU Tightens MiCA Pooled Order Books to Curb Liquidity Fragmentation
ESMA will enforce MiCA pooled order books to bar EU-approved crypto venues from combining EU and non-EU liquidity. France’s AMF, Austria’s FMA and Italy’s Consob want Level-1 MiCA text to mandate EU-only order-book pools for crypto trading and execution. The proposal targets regulatory arbitrage and ensures uniform EU crypto regulation. Platforms such as Coinbase plan to comply via a Luxembourg broker model, while Fireblocks warns of offshore liquidity risks if counterparties default. Legal advisers warn that restricting pooled order books to EU venues may fragment liquidity, widen bid-ask spreads and raise trading costs. Market participants face operational changes and legal uncertainty as ESMA refines guidance and national regulators push for a unified licensing regime across the 27-member bloc.
Neutral
Restricting MiCA pooled order books to EU venues may fragment liquidity and widen bid-ask spreads, leading to short-term trading cost increases. However, a unified licensing regime and clearer EU crypto regulation offer long-term legal certainty. Overall, market stability should hold steady as platforms adjust.