U.S.-based custodian gains green light under Europe’s new crypto rulebook, signaling regulatory clarity for digital asset infrastructure firms.
BitGo, a cryptocurrency custody provider based in the United States, has obtained a license under the European Union’s Markets in Crypto-Assets Regulation (MiCA), enabling it to legally offer digital asset custody and related services across all EU member states. The license was granted by Germany’s Federal Financial Supervisory Authority (BaFin), one of the most active and stringent financial regulators in Europe.
BitGo’s announcement, made on May 12, marks one of the first major approvals issued under MiCA, which officially began phasing in its regulatory regime for crypto asset service providers (CASPs) in 2024, with full enforcement expected by the end of 2025. The license puts BitGo in position to serve both crypto-native firms and traditional financial institutions, including banks and asset managers, throughout the European Economic Area under a single unified regulatory framework.
Although BaFin’s official registry had not yet been updated to reflect the license as of publication, BitGo said the approval was in place and confirmed the company’s plans to operate under the MiCA regime going forward.
Regulated Custody Takes Center Stage in Europe’s Crypto Framework
MiCA introduces a harmonized set of rules for crypto firms operating within the EU, replacing the patchwork of national regimes that had previously governed digital asset markets. Custody is one of the key pillars of the regulation, alongside issuance, trading, and exchange services. For firms like BitGo, securing a MiCA license enables access to the entire EU bloc without having to obtain separate authorizations in each country - a model akin to “passporting” in traditional financial services.
The license allows BitGo to act as a registered custodian of crypto assets, a role that includes safeguarding client funds, managing private keys, and ensuring asset segregation and recovery mechanisms. It also opens the door for BitGo to partner with financial institutions that are only willing to interact with entities operating under full regulatory compliance.
Germany, in particular, has become an important regulatory hub under MiCA. BaFin, which had already issued crypto custody licenses under Germany’s own 2020 regulatory framework (the “Kryptoverwahrgeschäft” license), is now extending those powers under the EU-wide MiCA umbrella. Other companies recently licensed by BaFin under MiCA include Bitpanda and Boerse Stuttgart Digital Custody.
BitGo's Expansion into the EU: Frankfurt Base and Strategic Registrations
Founded in 2013 in California, BitGo has long served institutional clients with multi-signature wallets, compliance tools, and insured custodial services. Its entry into the EU regulatory framework has been years in the making. The company established its European headquarters in Frankfurt in 2023 and has since registered with local financial authorities in several EU member states, including Italy, Spain, Poland, and Greece.
These registrations - now effectively superseded by the MiCA license - enabled the firm to begin building relationships with local institutions and regulators while awaiting full authorization. With the MiCA license now secured, BitGo can consolidate its EU operations and offer services on a cross-border basis.
The firm has not yet specified which products will roll out immediately under the MiCA framework. However, BitGo has emphasized its intent to provide a “broad range of institutional-grade solutions,” a phrase that typically refers to services such as segregated custody, staking, compliance monitoring, cold storage, and support for tokenized assets.
Competitive Landscape: Traditional Finance Meets Crypto Custody
BitGo’s regulatory approval places it in a growing field of crypto custodians that are aligning with MiCA standards to appeal to institutional clients. Custody, once a niche function offered mainly by crypto-native firms, has increasingly drawn the attention of banks, fintech firms, and asset managers seeking to enter the digital asset space without compromising security or compliance.
This trend has led to an evolving competitive dynamic. Some banks, particularly in Germany, have opted to build internal custody services under BaFin’s legacy licensing regime. Others have partnered with crypto-native custodians like BitGo or Fireblocks to integrate digital assets into their broader financial product offerings.
At the same time, several well-known players have hesitated or opted out of the MiCA registration process. For example, Tether, the issuer of the USDT stablecoin, has stated it will not pursue MiCA compliance in the near term, citing concerns over data reporting requirements and reserve transparency. This divergence highlights the ongoing tension between compliance costs and market access in the EU’s regulated digital asset environment.
MiCA’s Broader Impact: Investor Protection, Institutional Confidence, and De-risking
The approval of BitGo under MiCA is more than a bureaucratic milestone - it reflects a broader institutional shift underway in the digital asset sector. By codifying clear standards around custody, reserve requirements, governance, and disclosures, MiCA aims to reduce systemic risk, prevent fraud, and create a more predictable environment for investment.
For financial institutions considering crypto products, regulated custody is a non-negotiable starting point. Under European financial law, custodians must demonstrate operational robustness, IT security, internal controls, and recovery plans for asset losses or hacks. MiCA adds further requirements, such as reporting obligations and transparency around beneficial ownership and governance.
BitGo’s licensing therefore signals to the broader market that regulated infrastructure for digital assets is becoming more mature—and that firms offering institutional custody can now operate at the same legal and compliance level as traditional financial custodians.
Remaining Uncertainties: Implementation, Timing, and Market Fragmentation
While MiCA’s framework is clear on paper, the timeline for full implementation remains a work in progress. Different components of the regulation will come into force on a staggered basis through 2024 and 2025. Some elements - such as the regulatory treatment of stablecoins and the licensing of exchanges - are still subject to interpretive guidance from the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA).
There’s also the matter of competition from jurisdictions outside the EU. Countries like the UK and Switzerland have developed their own regulatory regimes for crypto custody and service providers, some of which are more flexible than MiCA. Firms operating across multiple jurisdictions will face ongoing challenges harmonizing their compliance strategies.
Furthermore, MiCA does not cover decentralized finance (DeFi), NFTs, or unhosted wallets in its current form - areas that remain legally ambiguous and may require future legislation.
Final thoughts
As the regulatory landscape crystallizes, a wave of infrastructure consolidation may follow. Firms that secure MiCA licenses early are likely to partner with or acquire smaller firms lacking compliance capacity. Likewise, custodians may integrate with tokenization platforms, staking providers, or digital asset marketplaces to offer end-to-end solutions under one regulatory roof.
BitGo’s licensing could signal the beginning of such trends, especially as demand increases for tokenized securities, digital funds, and crypto-based settlement systems in Europe. Institutional clients are likely to gravitate toward firms with comprehensive licenses and proven security models - traits that will define the competitive edge in Europe’s evolving crypto market.
BitGo’s approval under the EU’s MiCA regime marks a significant development in the professionalization and regulation of digital asset infrastructure in Europe. With a license granted by Germany’s BaFin, the firm can now operate across the EU under a single, harmonized legal framework, offering crypto custody services to both native crypto companies and traditional financial institutions.
The move reflects broader shifts in the digital asset space - where custody is no longer just about security, but about trust, compliance, and integration with global finance. As MiCA continues to roll out across the continent, the firms that align early with its standards are likely to shape the next chapter of institutional crypto adoption in Europe.