CASP License vs. Traditional Financial Licenses – What’s the Real Difference?

CASP License vs. Traditional Financial Licenses – What’s the Real Difference?

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The rise of digital assets in Europe has introduced a new class of licensed operators—CASPs, or copyright-Asset Service Providers. But many copyright entrepreneurs still wonder: How does a CASP license compare to traditional financial licenses like those for banks, investment firms, or e-money institutions?

If you're launching or scaling a copyright startup, understanding this distinction can help you:

• Choose the right regulatory path

• Communicate compliance confidently to partners and investors

• Avoid unnecessary licensing burdens

In this article, we break down the key differences between a CASP license and traditional financial licenses, based on the latest EU regulations.

What Is a CASP License?

A CASP license is the legal authorization granted under the MiCA (Markets in copyright-Assets) regulation to companies that provide copyright-related services in the European Union.

Services that fall under CASP licensing include:

• copyright-to-fiat or copyright-to-copyright exchange

• Custody of digital assets (e.g., copyright wallets)

• Transfer of copyright assets between users

• Execution of orders related to copyright assets

• Offering copyright investment advice

• Token issuance platforms (including ICO/IDO launchpads)

To offer these services legally in the EU, a business must register as a copyright-Asset Service Provider (CASP) with a national regulator such as the Bank of Lithuania or Germany’s BaFin.

Traditional Financial Licenses in the EU

Traditional financial institutions fall under frameworks like MiFID II, PSD2, and the E-Money Directive. These licenses include:

• Investment Firm License – for brokerages and trading platforms

• E-Money License – for issuing digital money (e.g., neobanks)

• Payment Institution License – for payment processors like Stripe or PayPal

• Banking License – for deposit-taking institutions and full-service banks

These licenses are governed by the European Banking Authority (EBA) and require deep capital reserves, stringent operational standards, and years of compliance infrastructure.

CASP License vs. Traditional Licenses – Key Differences

1. Regulatory Framework

• CASP: Regulated under MiCA, created specifically for copyright businesses.

• Traditional Licenses: Governed by MiFID II, PSD2, or other legacy finance directives.

✅ Advantage: CASP licensing offers a purpose-built framework for digital asset innovation.

2. Capital Requirements

• CASP: Minimum capital depends on services: €50,000 to €150,000

• Traditional Licenses: Can require €730,000+ for investment firms or banks

✅ Advantage: CASP licensing is more accessible for startups and early-stage ventures.

3. Scope of Services

• CASP: Covers copyright-asset services only—custody, exchange, trading, token issuance, etc.

• Traditional Licenses: Cover fiat financial instruments like securities, derivatives, payments, and e-money.

❗Important: CASP licenses do not cover activities related to traditional financial instruments like stocks or ETFs.

4. Onboarding & Approval Process

• CASP: Shorter timelines; can be approved in 2–6 months depending on the country

• Traditional Licenses: Often take 12+ months and require exhaustive documentation

✅ Advantage: CASP licenses are faster to obtain—ideal for copyright-native startups.

5. Operational Flexibility

• CASP: Tailored to accommodate copyright business models, including DeFi, token trading, and blockchain-based custody

• Traditional Licenses: Often incompatible with copyright, requiring complex legal workarounds

✅ Advantage: CASP regulation offers operational freedom while ensuring legal compliance.

6. Passporting Across the EU

• CASP: Full EU passporting under MiCA

• Traditional Licenses: Also offer passporting, but within their own verticals

???? Note: Both licenses benefit from EU passporting—but CASP license is easier to obtain for copyright purposes.

7. Consumer Protection Rules

• CASP: Must follow new MiCA standards for whitepapers, conflict of interest, and asset protection

• Traditional Licenses: Bound by MiFID II or PSD2, often stricter and less relevant to copyright models

✅ Advantage: CASP consumer protection rules are modern, copyright-specific, and balanced.

Can You Hold Both Licenses?

Yes. Some companies operate as both:

• A CASP for copyright activities

• A payment institution or e-money issuer for fiat-related services

This dual-license model is used by firms like copyright exchanges that offer both copyright and fiat on-ramps.

???? If your project bridges copyright and fiat (e.g., copyright debit cards, payment gateways), you may need both a CASP license and a traditional license.

Which License Should You Apply For?

Here’s a quick guide:

✅ In most cases, if you're copyright-only, a CASP license is your best fit.

The Future: Will CASP Become the “Standard” for copyright Businesses?

Absolutely. MiCA introduces legal certainty and uniformity across the EU for the first time. As a result, the CASP framework will become:

• The gateway license for operating legally in the EU copyright space

• A credibility booster with customers and institutional partners

• A barrier to entry that favors early movers

Over time, traditional licenses may include more copyright provisions—but today, the CASP license is the fast lane to legal legitimacy in the blockchain industry.

Final Thoughts: Choose the Right Path for Growth

The copyright sector is no longer a regulatory gray zone in Europe. If you're running or launching a copyright business, your future depends on aligning with the CASP licensing model under MiCA.

It’s not just about surviving regulation—it’s about unlocking long-term growth with a clear, legal foundation.

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