Licensing Roadmap
The fXYZ Network's three-phase approach to progressive regulatory authorization across the European Union.
Licensing Roadmap
The fXYZ Network pursues regulatory authorization through a phased approach, acquiring licenses progressively as the platform's services expand. This strategy manages capital requirements efficiently while ensuring that every service offered to users is fully authorized from day one.
Each phase builds on the previous one, broadening the range of services the platform can offer and the markets it can access.
Phase 1: Launch Authorization
Target: Q1 - Q2 2026
Phase 1 establishes the regulatory foundation for the platform's core services: stablecoin matching via order routing, fiat on/off-ramps, custody, and order execution.
Licenses Required
MiCA CASP Class 3 - Authorization to operate a trading platform for digital assets, covering all ten categories of crypto-asset services defined under MiCA Title V. This is the highest tier of CASP authorization, required because the order routing system constitutes a multilateral trading platform under Article 3(1)(18).
Payment Institution (PI) License - Authorization under the Payment Services Directive (PSD2, Directive (EU) 2015/2366) for fiat payment processing. This covers the on-ramp and off-ramp services that allow users to move between fiat currencies and digital assets via bank transfers (SEPA, ACH, wire).
Capital Requirements
| License | Minimum Own Funds | Prudential Buffer (Est.) | Total Range |
|---|---|---|---|
| MiCA CASP Class 3 | EUR 150,000 | EUR 20,000 - 75,000 | EUR 170,000 - 225,000 |
| Payment Institution | EUR 20,000 - 125,000 | Variable | EUR 20,000 - 50,000 |
| Combined Phase 1 | EUR 170,000 - 275,000 |
The PI minimum capital depends on the category of payment services. Category (e) services (payment execution) require EUR 125,000, while more limited services have lower thresholds. The applicable amount depends on the specific scope of the authorization sought.
Services Enabled
- Stablecoin OTC matching via order routing (USDC, EURC, and other regulated stablecoins)
- Fiat on-ramps and off-ramps (bank transfer, SEPA, wire)
- Custody and administration of digital assets on behalf of clients
- Order execution and order reception/transmission
- Transfer services for digital assets between client accounts
License Tracking
The fXYZ Knowledge Graph maintains a RegulatoryLicense schema that tracks each license's jurisdiction, status, capital requirements, and relationship to legal entities. This provides transparency and auditability for the network's compliance posture across all jurisdictions.
EU Passporting Strategy
MiCA authorization is obtained in a single EU member state and then passported to all other member states via a notification procedure (Article 65). The authorizing state's National Competent Authority (NCA) reviews the application, grants the license, and registers the CASP in ESMA's public register.
fXYZ Network will apply for CASP authorization in an EU member state with a functioning MiCA implementation framework and established NCA processing capacity. The authorized entity will then passport services to Poland and other EU member states where the platform has users, without requiring separate national authorizations.
Phase 2: EMI Upgrade
Target: H2 2026 - H1 2027
Phase 2 upgrades the platform's payment capabilities by obtaining an Electronic Money Institution (EMI) license, enabling the issuance of proprietary e-money tokens and expanded payment services.
License Required
Electronic Money Institution (EMI) - Authorization under the Electronic Money Directive (EMD2, Directive 2009/110/EC) for the issuance, distribution, and redemption of electronic money. Under MiCA, e-money tokens (EMTs) that reference a single fiat currency must be issued by either a credit institution or an authorized EMI.
Capital Requirements
| License | Minimum Own Funds | Operational Estimate |
|---|---|---|
| EMI | EUR 350,000 | EUR 150,000 - 300,000 |
The EMI minimum initial capital is EUR 350,000 (Article 4 of EMD2). Ongoing own funds must be the higher of EUR 350,000 or 2% of the average outstanding electronic money, calculated in accordance with the methods specified in Article 5 of EMD2.
Services Enabled
- Issuance of fXYZ-branded e-money tokens (network stablecoins)
- Expanded payment services including payment initiation and account information services
- Direct safeguarding of client funds (rather than relying on third-party payment providers)
Systematic Internaliser Consideration
Depending on trading volumes achieved during Phase 1, the platform may elect to register as a Systematic Internaliser (SI) for specific digital asset pairs. SI status under MiCA (Article 77) creates additional pre-trade transparency obligations but can provide competitive advantages in liquidity provision. This decision will be evaluated based on actual volume data.
Phase 3: Investment Services Expansion
Target: 2027 - 2028
Phase 3 extends the platform into regulated financial instruments territory by obtaining MiFID II investment firm authorization, enabling the offering of derivative products and securities-classified tokens.
License Required
MiFID II Investment Firm - Authorization under the Markets in Financial Instruments Directive (Directive 2014/65/EU) and the Investment Firms Regulation (Regulation (EU) 2019/2033). This is required for any services involving financial instruments, including derivatives (forwards, options, swaps) and tokens that qualify as transferable securities.
Capital Requirements
| License | Minimum Own Funds | Range (by Class) |
|---|---|---|
| MiFID II (Class 2) | EUR 150,000 - 750,000 | Depends on services and K-factor calculations |
MiFID II investment firms are classified under the Investment Firms Regulation (IFR) into three classes based on size, interconnectedness, and risk profile. The own funds requirement for Class 2 firms (the most likely classification for a platform of this scale) is the highest of: (a) the permanent minimum, (b) the fixed overheads requirement, or (c) the K-factor requirement.
Services Enabled
- Foreign exchange derivatives: forwards, options, and non-deliverable forwards (NDFs) on fiat currency pairs
- Securities-classified digital asset tokens (if applicable to future token designs)
- Multilateral Trading Facility (MTF) operation for both digital assets and financial instruments on a single platform
- Portfolio management and investment advice for qualified clients
Non-EU Expansion
Phase 3 also encompasses the establishment of non-EU entities for corridor operations outside the European Union. Turkey, as a major remittance and foreign exchange corridor, will be served through a local entity licensed under Turkey's Capital Markets Board (CMB) regulatory framework. Additional non-EU jurisdictions may be added through network member entities operating under local regulatory requirements.
Investment Summary
The table below summarizes estimated capital requirements across all three phases. Operational costs include technology infrastructure, compliance personnel, legal counsel, and external audit requirements.
| Phase | Regulatory Capital (Est.) | Operational Costs (Est.) | Timeline |
|---|---|---|---|
| Phase 1 | EUR 170,000 - 275,000 | EUR 100,000 - 200,000 | Q1 - Q2 2026 |
| Phase 2 | EUR 350,000+ (additional) | EUR 150,000 - 300,000 | H2 2026 - H1 2027 |
| Phase 3 | EUR 150,000 - 750,000 (additional) | EUR 200,000 - 500,000 | 2027 - 2028 |
Regulatory capital is not an expense; it is own funds that must be maintained on the balance sheet at all times. The figures above represent minimum thresholds. Actual requirements may be higher based on the fixed overheads calculation and, for MiFID II firms, K-factor calculations based on risk metrics.
EU Passporting
One of the most significant advantages of the MiCA framework is the EU passporting mechanism. Once authorized as a CASP in any EU member state, the platform can provide its authorized services in all 27 member states through a notification procedure. The process works as follows:
- The CASP notifies its home NCA of its intention to provide services in another member state
- The home NCA communicates the notification to the host member state's NCA within a prescribed timeframe
- The CASP may begin providing services in the host member state after the notification period expires
This eliminates the need for separate authorization applications in each country, dramatically reducing the time and cost of pan-European operations. The same passporting principle applies to PI and EMI licenses under PSD2 and EMD2, respectively.
Accounting and Prudential Reporting
Each licensing phase introduces specific accounting and reporting obligations that require dedicated workstreams:
- IFRS-compliant digital asset treatment - Digital assets are currently accounted for under IAS 38 (Intangible Assets) or, where applicable, under the forthcoming IASB standard on crypto-assets. The classification affects measurement, impairment testing, and disclosure requirements.
- MiCA prudential reporting - CASPs must submit regular prudential returns to their NCA covering own funds, client assets under custody, transaction volumes, and complaints data, in the formats specified by ESMA's implementing technical standards.
- PSD2 safeguarding - Payment institutions and EMIs must safeguard client funds through either: (a) segregated accounts at a credit institution, or (b) an insurance policy or comparable guarantee. The safeguarding method chosen has material implications for treasury operations and audit requirements.
Each of these areas requires specialized expertise and will be addressed through dedicated compliance and finance workstreams as the platform advances through each licensing phase.
References
- MiCA Full Text — Regulation (EU) 2023/1114 — CASP capital requirements (Articles 60-67), passporting (Article 65)
- PSD2 — Directive (EU) 2015/2366 — Payment institution authorization framework
- EMD2 — Directive 2009/110/EC — EMI initial capital (Article 4), own funds (Article 5)
- IFR — Regulation (EU) 2019/2033 — Investment firm prudential requirements
- MiFID II — Directive 2014/65/EU — Investment firm authorization
- ESMA CASP Authorisation Briefing (Jan 2025) — Guidance for national competent authorities on processing CASP applications
- MiCA CASP Licensing Guide — Latham & Watkins — Practical guide to CASP authorization requirements and procedures
Disclaimer: All capital figures, timelines, and cost estimates presented on this page are based on publicly available regulatory texts, published fee schedules, and general industry benchmarks as of early 2026. They are illustrative estimates and do not constitute financial projections or legal advice. Actual requirements will depend on the specific authorization scope, the competent authority's assessment, applicable delegated regulations, and market conditions at the time of application. fXYZ Network engages qualified legal and financial advisors for all licensing matters. Nothing on this page should be relied upon as a substitute for professional advice.