MiCA and the Czech National Bank: How to Avoid the Most Common Mistakes When Applying for a License

Every licence application submitted to the Czech National Bank (ČNB) has clearly defined requirements and specific features. An application for authorisation under the Markets in Crypto-Assets Regulation (MiCA) is no exception. Although these applications share a common structure, their scope will vary depending on the type of licence being sought. For example, an application for a crypto exchange licence will be more extensive than one for a crypto-asset advisory service.

The application is submitted to the ČNB using a standardised form, together with annexes that depend on the scope of the requested licence. To expedite the application process, it is essential that the applicant prepares a complete and high-quality set of all required attachments, thereby reducing the number of subsequent requests for additional documents.

Although the MiCA Regulation refers to a 60-day deadline (which is practically unenforceable) for the assessment of a licence application, a significantly longer processing time can be expected due to the large number of applications.

The key sources defining the content of a licence application are the MiCA Regulation itself and the related delegated regulations containing Regulatory Technical Standards (RTS), which specify the information that must be included in each application. In general, every application must include information about the applicant, a business plan, a set of internal policies, and details regarding the management and capital.

Based on our experience, the ČNB focuses primarily on the business plan, which must provide a detailed description of the intended activities, information about target clients, overall security and IT setup, and any planned marketing and promotional activities. This document is a crucial element that can determine whether the application is approved or rejected.

Although AML (anti-money laundering) obligations are not explicitly mentioned in the MiCA Regulation, the ČNB pays close attention to this area, as applicants will generally qualify as “obliged entities” under AML law. AML policies must be comprehensive, detailed, and regularly updated. Failure to comply with these requirements may result in sanctions or even rejection of the application.

The ČNB also places significant emphasis on the management team — particularly their knowledge and experience relevant to the intended activities. The Bank also regularly examines the origin of the capital to be used when starting the licensed business. The amount of capital should correspond to the scale of activities described in the business plan.

Another relatively new element of the licensing process is the requirement to implement and maintain policies ensuring the digital operational resilience of the financial market. Given that applicants’ activities will take place almost entirely in cyberspace, the ČNB will closely assess whether these policies and processes comply with the DORA Regulation and whether they are sufficiently robust for the intended business operations.

The key to a successful MiCA application lies in the quality of documentation, internal processes, and a thorough understanding of regulatory requirements. Avoiding unnecessary requests and delays requires cooperation with experts who have experience with licensing procedures and the specific expectations of the ČNB.