A Crypto-Asset Service Provider (CASP) is essentially a business that offers cryptocurrency services – like running crypto exchanges, providing digital wallets, or helping people trade and manage crypto – on a professional basis. In simple terms, if a company helps you buy, sell, store, or advise on crypto assets (such as Bitcoin or other tokens), that company is acting as a crypto-asset service provider.
The term CASP comes from the European Union’s recent regulatory framework for digital assets, and it defines the key players that connect everyday users with the world of crypto.
Origin of the CASP Term under MiCA
The concept of a “Crypto-Asset Service Provider” was introduced by the European Union’s Markets in Crypto-Assets regulation, commonly known as MiCA, developed to establish a unified approach to regulating crypto-assets across all 27 EU member states. The term CASP was first mentioned in the MiCA draft published in 2020, with the final regulation approved in 2023.
According to the official definition outlined in Article 3 of the MiCA regulation, a CASP is defined as:
“a legal person or other undertaking whose occupation or business is the provision of one or more crypto-asset services to clients on a professional basis, and that is allowed to provide crypto-asset services in accordance with the authorization issued to it.”
Under this framework, any legal entity whose business is to provide crypto-asset services to others on a professional basis – and who gets the proper authorization – is considered a CASP. In other words, MiCA set out a formal definition and rules for CASPs so that all such companies in Europe follow the same standards. This unified regulation replaces the patchwork of national rules that existed before and ensures that crypto services are regulated consistently across the EU.
Services Provided by CASPs
CASPs provide a range of services that make it easier and safer for people to interact with crypto-assets. MiCA outlines several types of crypto-asset services that CASPs can offer. In plain language, the typical services include:
- Cryptocurrency Exchanges: Operating platforms where users can buy, sell, or trade crypto assets (for example, exchanging Bitcoin for euros or swapping one crypto for another). These trading platforms match buyers and sellers, providing liquidity and price information for crypto markets.
- Custodial Wallets and Storage: Offering crypto custody services, which means holding and safeguarding crypto-assets on behalf of clients. A CASP might provide a secure digital wallet or account where you can store your coins, much like a bank holds money for customers.
- Brokerage and Order Execution: Helping users execute orders to buy or sell crypto, or transmitting those orders to exchanges on the user’s behalf. In practice, this could be a broker or an app that takes your trade orders and ensures they get fulfilled at the best available terms.
- Advisory and Portfolio Management: Providing advice on crypto-assets, such as investment recommendations or research, to clients. Some CASPs may also manage crypto portfolios for clients, similar to how a financial advisor manages a stock portfolio – they make decisions to buy/sell crypto for you under agreed terms.
- Crypto Transfers and Payments: Facilitating the transfer of crypto-assets on behalf of clients. For instance, a CASP might operate a service that lets you send crypto to others or pay merchants, taking care of the technical details of the blockchain transfer.
It’s important to note that if a business in the EU is doing any of the above (exchange, custody, trading, advice, etc. for crypto), MiCA considers it a CASP. Well-known examples of CASP activities would be major crypto exchanges, online wallet providers, and crypto trading apps that many users interact with. These services are now subject to specific rules and oversight under the MiCA regulation.
Why CASPs Matter for Users and the Market
Crypto-Asset Service Providers play a crucial role in the digital asset ecosystem. For everyday users, CASPs are the main gateway into crypto – they make it possible for someone who isn’t a technical expert to safely buy crypto, store it securely, or get expert help. CASPs “deliver the means for investors to obtain and exercise control over their crypto holdings”, effectively serving as the “gatekeepers” to crypto markets.
Without CASPs, using cryptocurrency would be much more complicated, as individuals would have to manage all the technical aspects (like private keys, blockchain transactions, finding trade partners) by themselves. By providing user-friendly platforms and services, CASPs lower the barrier to entry and help more people participate in the crypto market.
From Chaos to Compliance: How CASPs Create Stability
From a market perspective, CASPs bring structure and trust to what was once a very Wild West environment. Under MiCA, CASPs must be authorized and follow uniform rules to operate across the EU, which means they have to meet standards for things like security, transparency, and fairness. This regulatory oversight is designed to protect consumers (for example, by ensuring proper handling of assets and honest marketing) and to prevent issues like fraud or market manipulation.
In fact, operating within a clear regulatory framework helps build trust with customers and the broader financial system, which is vital for the long-term growth of the crypto industry. Because CASPs are now accountable to regulators, users can have more confidence that these providers will act professionally and in their best interest. Overall, CASPs make the digital asset market more stable and credible by aligning it closer with the standards people expect in traditional financial services.
CASP vs. VASP and Global Terminology
It’s worth noting that the idea of a crypto-asset service provider isn’t limited to Europe – different regions have similar concepts under different names. Outside the EU, the term you’ll often hear is Virtual Asset Service Provider (VASP). This term comes from the Financial Action Task Force (FATF), a global body that sets anti-money laundering standards. VASP refers to essentially the same kind of businesses – those that handle exchange, transfer, or safekeeping of virtual assets for others – but it’s the acronym used in international guidelines and many countries’ laws.
Global Crypto Terms Explained: CASP, VASP, DASP & More
For example, in the United States, regulators might not use the word “CASP”; instead, crypto exchanges and related businesses are often categorized as MSBs (money services businesses) or simply referred to as crypto exchanges/platforms, aligning with the broader FATF definition of a VASP. Similarly, other countries have their own terms: Japan speaks of “crypto-asset exchange service providers,” Australia uses CASSPrs (crypto-asset secondary service providers), France uses DASP (digital asset service provider) and so on.
The key point is that CASP (in the EU) and VASP (internationally) are closely related concepts. Both designate companies providing crypto-asset services to clients, but CASP is defined by the EU’s MiCA regulation, whereas VASP is a more general term under global standards. In informal conversation, people might use these terms interchangeably, but in legal contexts it’s important to use the correct term for the jurisdiction. If you’re in the EU or dealing with EU regulation, CASP is the term to know, and it comes with the specific requirements and protections of MiCA. If you’re outside the EU, VASP or the local equivalent is used – but the mission of these providers is very much the same: helping users interact with crypto in a safe and regulated way.
Conclusion
Crypto-Asset Service Providers are the friendly faces of the crypto world – the exchanges where you trade, the apps that hold your crypto wallet, the services that guide your crypto investments. The introduction of the CASP term under MiCA is a big step in bringing clarity and confidence to the European crypto market. It means that in Europe, these providers will operate under unified rules, making crypto services more secure and reliable for everyone. Whether called a CASP in the EU or a VASP elsewhere, these entities are central to the crypto experience, bridging the gap between complex blockchain technology and everyday users.
Navigating the Evolving Crypto Landscape with CASPs
With regulations like MiCA in place, crypto-asset service providers are set to become even safer and more integral to the growing digital asset economy – which is good news for crypto enthusiasts and newcomers alike, as well as for the overall health of the financial ecosystem. By understanding what CASPs are and how they operate, users can better navigate the crypto space and make informed decisions in this exciting yet evolving market.
