Traditional banks are expanding rapidly across Europe's regulated crypto market, and now represent nearly one in four providers listed under the European Union's Markets in Crypto-Assets (MiCA) framework — the bloc's single rulebook for crypto-asset services.

The number of banks on the EU's MiCA crypto provider list doubled to about 80 from roughly 40 between June 26 and Sept. 16, according to a Cointelegraph analysis of MiCA register data from the European Securities and Markets Authority (ESMA). The overall count of listed crypto-asset service providers (CASPs) climbed from 243 to 349 over the same period, but non-bank firms lost ground in relative terms, with their share slipping from about 84% to 77%.

Non-bank providers still dominate the register and continued to grow in absolute numbers. Banks, however, expanded far faster, lifting their share from around 17% in late June to nearly 23% by September. The faster pace means the makeup of Europe's regulated crypto market is changing even as it grows, with licensed banks taking a growing slice of a provider base still predominantly filled by crypto-native firms.

German banks pile into crypto

Germany drove much of the banking expansion, with dozens of cooperative and commercial banks appearing on ESMA's MiCA register. New entrants include Deutsche Bank, Germany's largest lender, which announced on Wednesday plans to launch digital asset custody services for institutional and corporate clients in Europe. A Deutsche Bank spokesperson told Cointelegraph that the bank expects to receive regulatory approval for the offering under MiCA in October.

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The trend extends beyond Europe's biggest banking groups. Germany's additions include numerous Volksbank, Raiffeisenbank and VR Bank institutions, showing that regulated crypto services are spreading into the country's regional cooperative banking network rather than remaining limited to large international banks.

Banks have a different route into MiCA

Unlike crypto companies, which must apply for CASP authorization, banks can provide crypto services under MiCA through a separate notification procedure. Under Article 60 of MiCA, a credit institution may provide crypto-asset services if it submits the required information to its home regulator at least 40 working days before providing those services for the first time.

The notification route gives banks a way to expand into crypto without going through the standard CASP authorization process. The result is two parallel entry paths into the EU market — CASP authorization for crypto companies and Article 60 notifications for credit institutions — and the register's bank-versus-non-bank split now serves as a running gauge of traditional finance's footprint in Europe regulated crypto market.