The EU is 20% of the world economy and home to a huge number of crypto enthusiasts. As a result, doing business here is incredibly promising, and there is a huge window of opportunity for development. However, to be able to work here legally, you need to obtain a crypto license in Europe. This isn’t easy to do, so many people wonder if it is worth the effort. Today, we want to talk more about this issue and explain the process of regulating this industry in this region.
EMI is a legal entity that is legally allowed to issue digital coins and carry out crypto transactions. The permitting period can vary from 2 months to half a year, depending on the chosen European jurisdiction. It is determined by the requirements of regulators in each state and the duration of thorough checks.
Why is an EMI license and its varieties necessary?
Having completed the permitting process, the organization will have rights similar to traditional payment organizations, having the ability to make financial payments online. The company can open individual accounts for its clients within its bank account and provide crypto storage facilities for storing digital coins.
Clients of such an organization will be able to purchase crypto issued by this company with their fiat funds and subsequently use this crypto asset to purchase goods and services and make other payments.
There is also a Small EMI (small permit). Let’s look at the main differences between these two types of permits:
- Authorized capital of 350 thousand euros;
- For small there are restrictions on the amount of issued crypto up to 5 million euros, and the number of transactions should not exceed 3 million euros;
- Small does not have a passport, which allows it to provide services throughout the European Union without additional requirements (the firm has the right to open its branches in the EEA);
- Obtaining small will take much less time;
- The amount of commission for registering an organization may differ by 10 times.
Thus, standard licensing provides more opportunities for business expansion.
How does the process of obtaining a document work?
The first requirement is a capital of 350,000 euros deposited into a bank account in the chosen jurisdiction. Before permitting, it is recommended to study the requirements of the regulator of a particular state. We list the basic requirements that are typical for any EU country:
- two managers must be residents of EU countries;
- documentary evidence of qualifications of personnel (diplomas, experience) and a certificate of clean reputation;
- presence of an actual office in a given area;
- a developed system that provides for possible risks (financial, cyber-attacks).
The accounting records and the creation of client accounts within the firm will also be checked.
Regulation of crypto business in this area
Each country in the EU sets its own rules for regulating this industry; however, several pieces of legislation are binding in all countries in this region.
Now, there is a transition period where regulators in European countries are beginning to adapt crypto firms to uniform requirements. This approach will be much more convenient compared to the fact that each European country has individual needs. By notifying the regulator of a particular country that people wish to get a permit, their company will be informed of the current requirements at that time.
This regulation provides a pan-European framework for digital asset service providers and activities: exchange, trading, and issuance of digital assets.
Based on the regulation, there will be three types of digital assets in the EU:
- tokens with fiat price;
- tokens; electronic currency;
- e-currency is different from tokens but tied to a specific value and electronic coins.
In addition to the allocated virtual funds, the Regulations provide for control over the following types of activities:
- provision of e-wallets for storage;
- management of client funds;
- exchange of different types of digital coins, as well as exchange for fiat;
- enforcement orders related to assets.
Such control will ensure the transparency and reliability of firms in European countries. It is a massive plus for those companies who plan to do business in a safe and secure regulatory system. Getting a permit in the EU is a promising and reliable start for business.
If you find it difficult to understand all the legal intricacies, you should seek help from Gofaizen-Sherle specialists. They have been working in this area for many years and are well versed in the legislation of different countries and can answer all your questions.