What the Authorisation Statistics Tell About the PSP and Crypto Sectors in the EEA and UK: A 2025 Outlook on Fintech Authorisation in Europe

As we reach the midpoint of 2025, the landscape of fintech authorisation in Europe continues to evolve dramatically, revealing striking patterns about regulatory preferences, market stability, and the ongoing impact of Brexit on payment services. Fresh data from both the EUCLID database and FCA Register through August 2025 paints a complex picture of where Electronic Money Institutions (EMIs) and Authorised Payment Institutions (APIs) are choosing to establish themselves, and more importantly, where they’re managing to survive. Moreover, this is even more illustrative when we look at Crypto Asset Service Providers (CASPs) authorisation statistics under MiCAR for the same dates.

The numbers tell a story that goes far beyond simple license counts. They reveal fundamental shifts in regulatory approaches, the emergence of new fintech hubs, and concerning trends in license stability that should give pause to anyone considering where to establish their next FinTech venture.

The State of EMI and API Licensing: A Mid-2025 Snapshot

The bottom line up front: The UK maintains its dominance in absolute numbers, but concerning cancellation rates and regulatory stringency are reshaping the fintech authorisation landscape across Europe.

Fintech hub of Europe no more? In the past 3.5 years, Lithuania has cancelled more EMI and API licenses than it has issued.

In the first eight months of 2025, European regulators issued 34 new EMI licenses and 22 API licenses across the EEA and UK. However, they also cancelled 14 EMI licenses and 26 API licenses, suggesting that the era of explosive, unchecked growth in e-money and payment services licensing has definitively ended.

20 EEA member states have issued zero EMI and 19 member states issued zero API licenses in 2025 to date (02.09.2025). Is the market already saturated, investment into FinTech slumped, entrepreneurs are running out of ideas for innovation, or the regulators have raised the bar of entry? Probably all of the factors combined, coupled with with geopolicital tensions and mediocre GDP growth in Europe.

EMI Sector: Stability with Selective Growth

The EMI sector demonstrates relative stability compared to its API counterpart. The UK continues to lead with 11 new EMI licenses issued in 2025, followed by Malta (5) and the Netherlands (5). This represents a more measured approach compared to the licence-granting frenzy of 2018-2020 documented in previous analyses.

Figure 1 EMI authorisations in Europe

Figure 2 EMI authorisation cancellations In Europe

Malta emerges as a clear EMI hotspot, with its 5 new licenses in 2025 representing significant activity for a jurisdiction of its size. The jurisdiction benefits from English-language capabilities, EU passporting rights, and what appears to be a more accommodating regulatory stance than some larger EU markets. With a cancellation rate of just 15% over the past six years, Malta offers both opportunity and relative stability.

Cyprus also merits attention, issuing 3 EMI licenses in 2025 while maintaining a 20% cancellation rate, reasonable by current European standards. The Netherlands, with 5 new EMI licenses and an impressive 11.11% cancellation rate, continues to attract fintech entrepreneurs seeking both market access and regulatory predictability.

API Sector: A Tale of Regulatory Stringency

The API sector reveals far more dramatic trends, with the UK’s staggering 80.36% cancellation rate serving as perhaps the most significant development in European fintech authorisation in the European policy. Compared to the 112 API licenses issued by the FCA since 2020, 90 have been cancelled in the same period (note: the majority of those 90 that were cancelled were authorised prior to the period analysed), a rate that suggests either extremely poor due diligence in the initial authorisation process or a regulatory environment that has become fundamentally hostile to payment institutions.

Figure 3 API authorisations in Europe

Figure 4 API authorisation cancellations In Europe

This UK API cancellation rate isn’t just high- it’s unprecedented among major financial jurisdictions. For comparison, the Netherlands maintains a 25.64% API cancellation rate, while Germany sits at 6.06%.

Figure 5 United Kingdom – EMI and API authorisations and cancellations

Overall, Germany stands out as the API stability champion, with only 2 cancellations out of 33 licenses issued (6.06% rate) and 2 new licenses in 2025. This suggests BaFin has either implemented more rigorous initial screening or provides a more supportive environment for ongoing compliance.

Emerging Regulatory Hotspots and Warning Signs

The Rise of Smaller EU Jurisdictions

Beyond the traditional fintech hubs, several smaller EU jurisdictions are making strategic plays for fintech market share. Ireland issued 2 new API licenses in 2025, maintaining its post-Brexit positioning as an English-speaking EU gateway.

Spain has quietly become active, issuing 2 API licenses in 2025 while maintaining a 37.5% cancellation rate. This suggests CNMV is taking a measured approach- more permissive than Germany, but far more sustainable than the UK’s recent experience.

Regulatory Red Flags: When Cancellation Rates Signal Systemic Issues

The data reveals several jurisdictions where cancellation rates suggest underlying regulatory or market problems:

• Malta’s API sector: A 250% cancellation rate (10 cancelled vs 4 issued) suggests serious regulatory challenges in the payments space, contrasting sharply with its EMI success
• Italy’s dual challenges: 78.57% API cancellation rate and 50% EMI cancellation rate indicate broader fintech authorisation problems
• Lithuania’s concerning trend: Despite its reputation as a fintech hub, Lithuania shows a 58.33% API cancellation rate and 31.43% EMI cancellation rate.

Perhaps even more importantly, with respect to Lithuania, is the fact that the Bank of Lithuania in the past 3.5 years has cancelled more EMI and API licenses than it has issued. From 2025 to the date of the research, BoL has issued zero EMI or API authorisations.

Figure 6 Lithuania – EMI and API authorisations and cancellations

These figures suggest that regulatory reputation and actual operational outcomes can diverge significantly, making due diligence on local regulatory practices essential for fintech entrepreneurs.

Brexit’s Continuing Impact on Fintech Authorisation in Europe

The Brexit effect remains clearly visible in 2025 licensing patterns. While the UK issued 6 new API licenses in 2025, it cancelled 14, resulting in a net loss of 8 API licenses. This negative net growth represents a fundamental shift from the UK’s historical role as Europe’s fintech licensing engine.

The diffusion away from the UK, identified in previous research, continues to benefit certain EU jurisdictions. The Netherlands, Germany, and Malta are primary beneficiaries, each offering different value propositions:

• Netherlands: English-language accommodation, regulatory pragmatism, and strong infrastructure
• Germany: Regulatory stability and market access, though with language barriers
• Malta: English language, EU passporting, and accommodating regulation (at least for EMIs)

Supervisory Implications: Toward More Sustainable Fintech Regulation

The 2025 data suggests European regulators are implementing more sophisticated approaches to fintech authorisation. The era of quantity over quality appears to be ending, replaced by:

1. Enhanced Due Diligence: Germany’s low cancellation rates suggest more thorough initial assessment processes are possible and effective.

2. Differentiated Regulatory Approaches: The stark difference between EMI and API treatment in various jurisdictions suggests that regulators are applying different risk assessments to different types of payment services.

3. Post-Authorisation Supervision: High cancellation rates in some jurisdictions may reflect more active ongoing supervision rather than initial authorisation failures.

The Regulatory Maturation Process

The current licensing patterns suggest fintech authorisation in Europe is undergoing a necessary maturation process. The 2018-2020 “licensing boom” documented in previous research created an oversupply of licenses, particularly in the API sector. The subsequent wave of cancellations represents market correction, weeding out entities that couldn’t sustain compliance requirements or viable business models.

This process, while potentially discouraging for new entrants, should ultimately create a more sustainable and credible fintech ecosystem. Regulators appear to be learning that maintaining licensing standards benefits both the industry and consumers in the long term.

The MiCAR Revolution: Crypto Licensing Shows a New Regulatory Paradigm

The emergence of comprehensive crypto asset service provider (CASP) data under MiCAR reveals a striking contrast with traditional patterns of fintech authorisation in Europe. In just eight months (December 2024-August 2025), European regulators processed 54 MiCAR authorisations across 11 jurisdictions- a pace that matches traditional payment services licensing but with fundamentally different characteristics.

Figure 7 EU CASP Authorisations by state

Germany Leads the Crypto Regulatory Charge

Germany’s dominance in crypto licensing represents perhaps the most significant development in European financial regulation. With 17 MiCAR authorisations (31.48% of the total), BaFin has positioned Germany as Europe’s primary crypto regulatory hub. This leadership includes major institutional players like Commerzbank, N26 Bank, and BitGo Europe, signalling mainstream financial sector adoption.

The German approach utilises all three MiCAR authorisation pathways: full authorisations for crypto specialists, notifications for existing financial institutions, and simplified procedures for specific use cases. This regulatory sophistication contrasts sharply with the “one-size-fits-all” approach that contributed to traditional payment services’ high cancellation rates.

Netherlands: The Crypto Gateway Strategy

The Netherlands’ 14 MiCAR authorisations represent a strategic play for crypto market leadership. Unlike Germany’s institutional focus, Dutch regulators have authorised a diverse ecosystem including MoonPay, Bitvavo, BTC Direct, and Acheron Trading. This approach leverages the Netherlands’ established fintech infrastructure while expanding into crypto services.

Notably, the Netherlands processed more crypto authorisations (14) than new API licenses (2) in 2025, suggesting a strategic pivot toward crypto services regulation.

The MiCAR Quality Advantage

Unlike traditional payment services licensing, no MiCAR cancellations have been reported since implementation began. This zero cancellation rate represents a fundamental improvement over traditional PSP licensing, where average cancellation rates reach 24% for EMIs and 45% for APIs. Though it is also too early to have actual comparable numbers ready, as the regulatory landscape of MiCAR is live for less than a year, and usually authorisations for the entities become cancelled later down the road.

Still, the overall approach of MiCAR authorisations reflects several factors:

• Front-loaded regulatory scrutiny: MiCAR’s comprehensive initial assessment process
• Regulatory learning: Lessons from traditional payment services licensing failures
• Higher barriers to entry: More rigorous initial requirements filtering out weak applications
• Institutional involvement: Major banks using notification pathways bring compliance expertise

Traditional PSP vs Crypto Licensing: A Tale of Two Approaches

The contrast between traditional and crypto licensing reveals evolutionary regulatory thinking:

Traditional PSP Licensing (2025 data till August):

• 56 new licenses issued (34 EMI + 22 API)
• 40 licenses cancelled (14 EMI + 26 API)
• High cancellation rates indicating regulatory failures
• “Issue first, regulate later” approach

MiCAR Crypto Licensing (Dec 2024-August 2025):

• 54 authorisations processed
• Zero reported cancellations
• Multiple authorisation pathways
• “Assess thoroughly, authorise carefully” approach

This comparison suggests that European regulators have internalised lessons from traditional payment services regulation, applying more sophisticated approaches to crypto asset services.

Strategic Implications for Fintech Entrepreneurs

Jurisdiction Selection in 2025

For fintech entrepreneurs considering fintech authorisation in Europe, the 2025 data suggests several strategic considerations:

For EMI Licenses:

1. Malta and Cyprus offer the best combination of new license activity and reasonable cancellation rates
2. Ireland and the Netherlands provide regulatory stability with strong infrastructure
3. UK remains viable for domestic-focused businesses, but has lost EU market access advantages

Figure 8 EMI new authorisations ranking by 2025 results

For API Licenses:

1. Germany offers unparalleled regulatory stability, albeit with language and bureaucratic challenges
2. Spain, Ireland, and the Netherlands provide a balanced approach with reasonable cancellation rates
3. Avoid jurisdictions with >50% cancellation rates unless compelling business reasons exist

Figure 9 API authorisations ranking by 2025 results

The New Reality of Fintech Regulation

The 2025 licensing statistics reveal that successful fintech authorisation in Europe now requires:

• Stronger initial compliance foundations: High cancellation rates suggest regulators are less tolerant of post-authorisation compliance failures
• Jurisdiction-specific risk assessment: Cancellation rates vary dramatically, requiring careful due diligence on local regulatory practices
• Long-term sustainability planning: The era of “quick license, iterate later” has clearly ended

Looking Forward: The Future of Fintech Authorisation in Europe

As we progress through 2025, several trends appear likely to continue:

Regulatory Consolidation: Expect further cancellations as regulators complete their review of entities authorised during the 2018-2020 boom period.

Quality Over Quantity: New authorisations will likely emphasise thorough compliance frameworks and viable business models over rapid market entry.

Jurisdictional Specialisation: Different EU jurisdictions are developing distinct regulatory personalities- some prioritising stability, others emphasising innovation, still others focusing on specific fintech sectors.

Brexit Adjustment Completion: The UK’s role as a fintech licensing hub continues to diminish, with the negative net growth in 2025 suggesting this adjustment process is nearing completion.

Lessons from the Data: What 2025 Licensing Statistics Really Tell Us

The mid-2025 licensing data reveals fundamental truths about the current state of fintech authorisation in Europe that extend beyond simple regulatory scorekeeping.

Regulatory Learning Curves Are Real

The dramatic variation in cancellation rates between jurisdictions- from Germany’s 6.06% API cancellation rate to the UK’s 80.36%- demonstrates that regulatory approaches matter enormously. These aren’t random variations; they reflect conscious policy choices about initial screening rigour, ongoing supervision intensity, and tolerance for compliance failures.

Germany’s success model appears to emphasise thorough initial assessment over rapid authorisation. While this may slow time-to-market, it clearly produces more sustainable outcomes. BaFin’s approach suggests that “measure twice, cut once” applies to financial services regulation.

The UK’s situation reflects the consequences of prioritising speed and market growth over sustainability. The FCA’s historical approach of encouraging innovation through rapid licensing has produced a regulatory cleanup that continues through 2025.

Lithuania’s disproportionately large EMI portfolio is likely to continue to shrink, given the approach of the Bank of Lithuania to the new authorisation applications. Ireland, the Netherlands, Malta, and Cyprus are now much better choices for building your EU-based FinTech unicorn.

Market Dynamics Drive Regulatory Outcomes

The stark difference between EMI and API cancellation rates (averaging 26.67% vs 52.42% respectively, across all jurisdictions) suggests that business model sustainability varies significantly between payment service types. EMIs, which typically operate with clearer business models and revenue streams, demonstrate greater resilience than APIs, which often struggle with complex regulatory requirements and unclear monetisation strategies.

This pattern holds across most jurisdictions, suggesting that the underlying economics of different payment services, rather than just regulatory approaches, influence licensing sustainability.

Size Doesn’t Guarantee Success

Malta’s divergent performance between EMI (15% cancellation rate) and API (250% cancellation rate) sectors demonstrates that even successful regulatory approaches can fail when applied inconsistently across different license types. Malta’s MFSA appears to have developed effective EMI supervision while struggling with API oversight.

Similarly, Lithuania’s mixed results- historically successful but showing concerning cancellation rates in the past 3.5 years suggest that past performance doesn’t guarantee future regulatory effectiveness.

The Broader Context: European Fintech Regulation in Global Perspective

The 2025 European licensing data gains additional significance when viewed against global fintech regulatory trends. While comprehensive international comparisons remain challenging due to different regulatory frameworks, the European experience offers several insights discussed below.

Regulatory Sophistication Increases Over Time

The evolution from the 2018-2020 “licensing boom” to the more measured 2025 approach demonstrates regulatory learning in action. European regulators have clearly internalised lessons about the costs of over-permissive initial authorisation.

This regulatory maturation process mirrors developments in other major fintech markets, suggesting that fintech authorisation in Europe is part of a broader global trend toward more sophisticated regulatory approaches.

Post-Brexit Regulatory Competition

The data reveals ongoing regulatory competition between EU jurisdictions seeking to capture fintech market share previously concentrated in London. This competition benefits the overall European fintech ecosystem by encouraging regulatory innovation and responsiveness.

Netherlands, Germany, and Malta have emerged as primary beneficiaries, each developing distinct competitive advantages. This diversification reduces systemic risk while providing entrepreneurs with meaningful jurisdictional choices.

Practical Recommendations for Industry Stakeholders

The 2025 data reveals distinct strategic considerations for crypto firms, which we’ll cover below in more detail.

Crypto Jurisdiction Selection Strategy

Germany and the Netherlands dominate MiCAR authorisations with 31 of 54 total approvals. These jurisdictions offer regulatory expertise, institutional support, and established crypto ecosystems.

Authorisation Pathway Selection

The MiCAR framework offers three distinct routes to authorisation, each designed for different business models and regulatory situations. The distribution of choices- 32 full authorisations, 19 notifications, and 3 simplified procedures- reveals important strategic considerations for crypto firms entering the European market.

Thirty-two firms pursued full authorisation under MiCAR, representing the comprehensive route for entities seeking to operate as dedicated crypto asset service providers. This pathway appeals primarily to crypto-native companies like Coinbase Luxembourg, Bitvavo, BitPanda, and Kraken’s European entity (Payward Europe Solutions Limited), with recent additions including Finland’s Coinmotion and the Netherlands’ Decubate demonstrating continued demand for comprehensive crypto service provision. These firms typically require the broadest possible service scope under MiCAR, including combinations of custody services, crypto-to-fiat exchange, trading platform operations, portfolio management, and investment advice. The full authorisation process involves the most rigorous regulatory assessment, requiring firms to demonstrate comprehensive compliance with MiCAR’s capital requirements, governance standards, operational resilience measures, and consumer protection frameworks from the ground up.

Nineteen existing financial institutions chose the notification pathway, which represents a more streamlined approach for regulated entities seeking to add crypto services to their existing offerings. This route has proven particularly attractive to established banks and investment firms that can leverage their existing regulatory infrastructure and compliance capabilities. Notable examples include major institutions like Commerzbank, Spain’s BBVA, Germany’s N26 Bank, Luxembourg’s Clearstream Banking, and France’s CACEIS Bank, with August additions including Spain’s OPEN BANK (operated by Santander) and CECABANK demonstrating increasing Spanish institutional interest. These institutions benefit from their existing regulatory relationships and can demonstrate that their current risk management, governance, and operational frameworks can accommodate crypto asset services without requiring entirely new authorisation processes. Three entities utilised simplified procedures, representing an accelerated pathway for specific circumstances under MiCAR. This route typically accommodates subsidiaries of already-authorised entities, companies seeking very limited crypto service scope, or firms that qualify for expedited processing under particular regulatory provisions. The simplified approach allows certain entities to avoid the full authorisation process when their activities or corporate structure justify streamlined treatment, though they must still meet core MiCAR requirements relevant to their specific operations.

UK vs EU Strategic Choice

The regulatory divergence between the UK and EU crypto frameworks creates distinct strategic considerations for crypto firms. The UK’s MLRs-based approach, established between 2020-2022, focuses primarily on anti-money laundering compliance with 55 currently registered firms, including established players like Archax, Ziglu, and Gemini Payments UK. This framework emphasises AML compliance over comprehensive operational oversight, creating a different regulatory environment than the EU’s approach. Notably, it is also pending review and update- you can read our take on the UK Cryptoasset Regulation 2025 here.

The EU’s MiCAR framework offers single market access across 27 member states but requires comprehensive authorisation covering operational resilience, governance standards, capital requirements, and consumer protection measures. With 54 authorisations processed across 11 jurisdictions since December 2024 to August 2025, MiCAR represents a more operationally focused regulatory regime. Firms must carefully consider whether their business model requires the comprehensive operational permissions that MiCAR provides, or whether the UK’s AML-focused regime aligns better with their service offerings and target markets.

Regulatory Evolution in Practice

The contrast between traditional payment services licensing and MiCAR implementation reveals important lessons about regulatory design. While traditional payment services show concerning cancellation patterns, with API sectors averaging 52.42% cancellation rates and some jurisdictions like Malta reaching 250.00%, the crypto sector operates under different initial parameters. MiCAR’s comprehensive front-loaded assessment process, combined with its tiered authorisation pathways and institutional notification procedures, represents an evolution in regulatory thinking based on lessons learned from traditional payment services regulation. The framework’s emphasis on detailed initial compliance assessment rather than post-authorisation enforcement suggests regulators have internalised the costs of the “issue first, regulate later” approach evident in traditional PSP licensing.

For Traditional Financial Institutions

The MiCAR data reveals significant institutional adoption opportunities:

The Notification Pathway Opportunity

The MiCAR implementation reveals a transformative moment for traditional financial institutions seeking to integrate crypto asset services into their existing operations. Major European banks have discovered that MiCAR’s notification pathway provides a viable route to crypto market participation without the regulatory burden of starting from scratch. Institutions like Commerzbank, Spain’s BBVA, Germany’s N26, and Luxembourg’s Clearstream Banking have successfully leveraged their existing regulatory infrastructure to add crypto capabilities, demonstrating that established financial entities can adapt to crypto markets while maintaining their core banking operations.

Competitive Pressure from Crypto-Native Firms

This institutional movement into crypto services creates mounting competitive pressure on traditional banks that have yet to embrace digital assets. With twenty-three crypto-native firms securing full MiCAR authorisations, specialised crypto service providers are establishing strong regulatory positions across Europe. These firms often possess technical expertise and operational agility that traditional institutions struggle to match, forcing established banks to either develop crypto capabilities or risk losing market share to more nimble competitors.

First-Mover Advantages in Emerging Markets

The timing of institutional crypto adoption appears increasingly critical, as early-moving institutions- particularly German banks working with BaFin- are establishing market positions while MiCAR frameworks remain in their nascent stages. This first-mover advantage extends beyond simple market timing; early adopters gain regulatory experience, build operational capabilities, and establish customer relationships in what may become a significant new revenue stream for traditional financial services.

Conclusion: The Future of Fintech Authorisation in Europe

The 2025 fintech authorisation in the European landscape reveals a regulatory ecosystem in rapid evolution, with traditional payment services regulation learning from past mistakes while crypto asset regulation demonstrates sophisticated regulatory design from inception.

The tale of two regulatory approaches

Traditional PSP regulation continues its painful maturation process, with 2025 showing 56 new licenses but 40 cancellations, reflecting ongoing cleanup from the 2018-2020 licensing boom. The UK’s 80.36% API cancellation rate exemplifies the costs of prioritising speed over sustainability.

MiCAR crypto regulation represents regulatory evolution in action, with 54 authorisations processed. Germany’s leadership (17 authorisations) and the Netherlands’ strategic positioning (14 authorisations) demonstrate how sophisticated regulatory approaches can balance innovation with stability.

Key implications for the remainder of 2025 and beyond:

• Regulatory quality trumps quantity: MiCAR’s success suggests that a thorough initial assessment produces better outcomes than post-authorisation enforcement
• Jurisdictional specialisation accelerates: Germany leads crypto regulation while maintaining traditional PSP stability; the Netherlands balances both sectors; Malta excels in EMIs while struggling with APIs
• Brexit creates parallel innovation tracks: UK’s 55 CASP registrations vs EU’s 54 MiCAR authorisations represent different philosophical approaches to crypto regulation, with the changes to the regulation still pending and possibly reducing the number in the UK even more
• Institutional crypto adoption validates regulatory frameworks: Major banks successfully using MiCAR notification procedures demonstrate regulatory maturity

The regulatory learning curve is evident: European authorities have clearly internalised lessons from traditional payment services regulation, applying more sophisticated risk assessment, tailored authorisation pathways, and front-loaded compliance requirements in crypto regulation.

For industry participants, the message is nuanced: while traditional fintech authorisation in Europe requires careful jurisdictional selection and robust compliance frameworks, crypto asset regulation offers clearer pathways and higher success rates- provided firms meet rigorous initial requirements.

For the broader financial ecosystem, the data suggests that European financial regulation is entering a new phase characterised by:

• Sophisticated risk-based approaches rather than one-size-fits-all frameworks
• Integration of traditional and crypto financial services under coherent regulatory umbrellas
• International coordination produces better outcomes than fragmented national approaches
• Recognition that regulatory sustainability requires front-loaded scrutiny rather than post-authorisation cleanup

As we progress through the second half of 2025, the continuing evolution of both traditional and crypto fintech authorisation in Europe will provide crucial insights into the future of global financial regulation- and the emergence of a more sustainable, sophisticated approach to innovation in financial services.