On 2 September 2025, the Central Bank of Ireland (“Central Bank”) updated its frequently asked questions (“FAQs”) under the regulation on markets in crypto-assets (“MiCA”).

The FAQs were last updated on 19 December 2024. The following is an overview of the updates:

• There are two new questions and answers under the authorisations section of the FAQs, dealing with the following:
  • the notification process for a credit institution, MiFID investment firm, electronic money institution (“EMI”), an in-scope UCITS management company or alternative investment fund manager which is proposing to provide crypto-asset services; and
  • the simplified authorisation assessment procedure in place for firms that are seeking other authorisations in addition to a crypto-asset service provider (“CASP”) authorisation under MiCA.

     

• There are five new questions and answers under the expectations section of the FAQs, addressing the following:
  • the Central Bank’s expectations in relation to a firm’s ability to demonstrate substance and autonomy in Ireland;
  • the Central Bank’s position on dual-hatting of pre-approval controlled function (“PCF”) / controlled function (“CF”) role holders between an EMI and a CASP within the same group;
  • the way in which the Central Bank’s supervisory expectations / risk appetite will be applied to firms that target institutional clients only;
  • the Central Bank’s requirements for CASPs regarding the submission of registers of information (“RoIs”) in relation to the use of ICT services under DORA; and
  • the minimum qualification, experience and CPD required for staff giving information on crypto-assets and crypto assets services to clients.

     

• Under the policy section of the FAQs, the following has been updated:
  • in the question dealing with whether it is possible for stakeholders to continue to provide crypto-asset services for ARTs and EMTs which are not compliant with MiCA, the answer has been updated to state that the Central Bank expects firms listing any stablecoins that are not compliant with MiCA to implement these actions as soon as possible and they should aim to complete this work by end Q1 2025. This question had previously referred to year end 2024; and
  • the question dealing with whether the Consumer Protection Code applies to CASPs / EMIs / CIs /other RFSPs when providing crypto-asset services and / or when issuing or offering ARTs / EMTs, has been updated to refer to the revised Consumer Protection Code that will take effect on 26 March 2026 and will apply to all activities regulated under MiCA.

     

• In the section addressing virtual asset service providers (“VASPs)”, the following has been updated:
  • the question regarding the Central Bank’s communication to VASPs that all new VASP applicants should seek a CASP authorisation under MiCA rather than pursuing a VASP registration has been removed.

     

• Two new sections have been added to the FAQs addressing the following:
  • Title II notifications; and
  • Complaints Handling. 

2. Central Bank publishes its funding strategy and guide to the 2025 industry funding regulations

On 4 September 2025, the Central Bank of Ireland (“Central Bank”) published its Funding Strategy and Guide to the 2025 Industry Funding Regulations (“Guide”).

The Guide deals with the Central Bank Act 1942 (Section 32D) Regulations 2025 (“Regulations”), which are directed at recovering the industry share of the costs of financial regulation. The Regulations apply to all entities / persons that are regulated by the Central Bank.

The Guide is comprised of six sections as follows:

• Funding strategy, which aims to:
  • increase the proportion of costs paid by industry and reduce the burden on the taxpayer, while avoiding excessive movements in levy rates at a sectoral level from one year to the next insofar as is possible; and
  • reduce complexity and risk in the areas of funding policy and execution.

     

• Background to the 2025 Industry Funding Regulations - some of the matters addressed are as follows:
  • the applicability of the Regulations;
  • collection of the levy, noting that the Central Bank sends a levy invoice to almost all regulated entities after the Regulations are published. However, even if a regulated entity does not receive a levy invoice, it is still legally obliged to pay the appropriate levy for its industry funding category in the Regulations;
  • update to the arrangements for levy invoices, including information as to use of the Central Bank portal;
  • supplementary levies as regards an additional levy in respect of the funding of a particular initiative or regulatory action; and
  • appeals and waivers.

     

• Recovery Rates, with the Central Bank stating that the Regulations reflect agreed increases in recovery rates and are applied to each sector’s share of financial regulation costs;

   

• Calculation of the Industry Funding Levy for each industry category:
  • credit institutions / intermediaries and debt management firms / high cost credit providers / approved professional bodies / bureaux de change / retail credit firms and credit servicing firms / payment institutions and e-money institutions / virtual asset service providers / crowdfunding service providers are required to pay an industry funding levy as set out in the various corresponding tables in the Guide; and
  • insurance undertakings, investments firms, category E1 investment funds and category E2 alternative investment fund managers are required to pay the levy contribution corresponding to their impact category as determined in accordance with the Central Bank’s probability risk and impact system (“PRISM”) framework; and
  • a credit union is liable to pay a levy of 0.03% of total assets as reported in its quarterly prudential return setting out its balance sheet as at 31 December 2024.

     

• Financial Information for Industry Sectors – some of the matters highlighted under this heading include:
  • the Central Bank’s 2024 adjusted cost of financial regulation activities was €261.9 million, an increase of €24.9 million compared to 2023; and
  • subvention features in the final rates for certain categories in the Guide, with the Guide stating that “…subvention is applied only in specific circumstances where, in the Central Bank’s judgement, relief is warranted.”

     

• Appendices, which consist of:
  • a table showing a comparison of the 2023 and 2024 net annual funding requirement; and
  • the population of each industry sector. 

On 9 June 2025, the Central Bank of Ireland (“Central Bank”) announced the theme of its 2026 innovation sandbox programme (“2026 Sandbox”).

The theme for the 2026 Sandbox will be “Innovation in Payments” and was announced at a showcase event held by the Central Bank as regards the inaugural innovation sandbox programme, the theme of which was “Combatting Financial Crime”.

Speaking at the showcase event, Mary-Elizabeth McMunn, Deputy Governor, Financial Regulation at the Central Bank, stated:

“Our experience with the Sandbox has demonstrated the benefits of innovation and looking at things from new perspectives, which will be critical in tackling financial crime in the coming years.”

Next Steps

The Central Bank has stated that it will announce further details on the 2026 Sandbox in due course, including problem statements, an application form, FAQs and a guidance note.

On 10 September, 2025, European Commission President von der Leyen delivered her 2025 State of the Union Address. This was the President’s first State of the Union of her second term. The overarching theme was that of independence and unity in the face of global challenges. For the purposes of this note we are focusing on those aspects of the address that are likely to impact the financial services sector.

Single Market

While the President described the Single Market as Europe’s greatest asset she also explained that “it remains unfinished” in the areas of finance, energy, and telecommunications. She also referenced data from the IMF that estimates that internal barriers within the Single Market are equivalent to a 45% tariff on goods and a 110% tariff on services. As against this background, she confirmed that a Single Market Roadmap to 2028 will be presented in the coming months covering capital, services, energy, telecoms, the 28th regime and the fifth freedom for knowledge and innovation.

Capital Market Development

The President indicated that the Commission will partner with private investors on a multi-billion euro Scaleup Europe Fund to help make major investments in young, fast-growing companies in critical tech areas, with the goal that the best of Europe Choose Europe.

Digital Euro Initiative

The President emphasised the importance of continuing to work on a digital Euro as it will make it easier for companies and consumers alike, representing part of the broader effort to reduce bureaucratic costs and simplify business operations.

Regulatory Simplification

The message here was clear, business in Europe needs to be made easier. The President explained that the Commission, through omnibuses, will cut €8 billion a year of bureaucratic costs for European companies. 

On 28 August 2025, the European Parliament (“Parliament”) published an “In-Depth Analysis” (“Analysis”) on the debate as to simplification versus deregulation in the sphere of EU banking regulation and supervision, in the context of the wider discussion on European competitiveness.

The Analysis refers to the Parliament’s 2024 Banking Union annual report, adopted in May 2025, which highlighted issues regarding the profitability, competitiveness and operating conditions of European banks, particularly the high supervisory costs and the regulatory burden. This 2024 report also called for proportionality and simplification.

Simplification versus Deregulation

The Analysis makes the point that the distinction between simplification and deregulation is not often readily apparent and describes simplification as “trying to maintain the prudence of the regulatory framework while reducing its operating cost”, while pointing out that deregulation reduces that prudence.

Added to this, the Analysis highlights, it the complexity of banking and finance, noting that the range and diversity of financial products available requires more differentiation and complexity in regulatory and supervisory responses.

Some other matters highlighted under this heading include:

• the possibility of a middle ground where innovation and complexity is somewhat limited but would perhaps result in a less complex banking system;
• the choice of a risk-sensitive regulatory approach that tries to take account of individual products and business models is unavoidable, requiring a differentiated system of requirements that is unavoidably complex to some extent;
• materially reducing complexity or risk sensitivity may effectively come down to deregulation, again illustrating the point that it can be difficult to distinguish between simplification and deregulation; and
• supervisors emphasise that simplification must not become an excuse for reducing fundamental protections.

The Analysis suggests three categories of simplification measures, requiring further thought, as follows:

• the elimination of inefficiencies in implementation that clearly do not contribute to the quality of regulation and supervision;
• the elimination of complexity in the regulatory framework with spurious benefits for risk sensitivity; and
• the elimination of complexity from the framework while accepting that risk sensitivity is reduced.

ECB / SSM Simplification Efforts

The Analysis sets out and describes the simplification efforts on the part of the European Central Bank (“ECB”) and the Single Supervisory Mechanism (“SSM”), particularly focusing on:

• the ECB high-level task force on simplification, tasked with developing proposals for simplifying the European prudential regulatory, supervisory and reporting framework, while still maintaining a strong banking sector in Europe; and
• a speech delivered by Claudia Buch, chairperson of the SSM, where she discusses simplification, which the Analysis notes, gives an idea of the simplification efforts of the ECB and SSM and includes reference to the SSM’s focus on making supervision more efficient and effective / the ongoing reform of the supervisory review and evaluation process (“SREP”).

Commentary from other Supervisors on Simplification

While the Analysis discusses Ms Buch’s speech at length, it also points to commentary from other senior supervisors on the topic of simplification, such as:

• François Villeroy de Galhau, Governor of the Banque de France who has cautioned that adopting a deregulationist approach would not only threaten the coherence of the Banking Union, but would also reduce the comparability and predictability of supervisory outcomes;
• Fabio Panetta of the Bank of Italy;
• Joachim Nagel of the Bundesbank;
• Pablo Hernández de Cos of the Bank of Spain;
• Sharon Donnery, member of the ECB Supervisory Board, noting that she specifically warned against attempts to loosen capital requirements for smaller or less complex banks under the guise of proportionality; and
• Patrick Montagner, member of the ECB Supervisory Board, with the Analysis highlighting his proposition that simplification must go hand in hand with supervisory convergence, better tool standardisation, and the avoidance of duplicative efforts between national and European authorities.

Contributions from Stakeholders

The Analysis also considers, in depth, contributions from various stakeholders and their proposals as regards simplification, as follows:

• “Simply Competitive” - Recommendations for simplification from the European Banking Federation; and
• “Less is more – Proposals to simplify and improve European rule-making in the financial services sector”, a report published in February 2025 by a group of academic, legal, and professional experts with the support of major European financial associations and the European Banking Industry Committee.

Commission’s Efforts

The Analysis goes on to set out and discuss the efforts of the European Commission (“Commission”) as regards the simplification of banking regulation. Some of the initiatives discussed in the Analysis include the following:

• the proposed securitisation package which includes a significant streamlining of disclosure requirements under the Securitisation Regulation;
• the Omnibus I initiative, noting that while it does not specifically address the banking sector, it does introduce changes as regards sustainable finance disclosures; and
• the adoption, by the Commission, of a delegated act under the Taxonomy Regulation to simplify sustainability reporting requirements for credit institutions.

Conclusions

The last section of the Analysis deals with conclusions on foot of the discussion in the Analysis and also warns of risks associated with simplification, some of which are as follows:

• the gradual erosion of safeguards under the guise of simplification;
• regulatory arbitrage and fragmentation;
• possible biases on the part of those designing simplification measures that lean towards procedural rather than structural change; and
• a possible lack of robust impact assessment mechanisms for simplification initiatives.