Rather than regulating decentralized finance through the second edition of the Markets in Cryptocurrency Regulation (MiCA), the European Union should focus on a broader digital asset framework that covers real-world assets and tokenization, a European Commission advisor said.
The European Commission launched a public consultation on MiCA in May and asked for feedback until August 31st.
“I don’t think[MiCA]is outdated now. That’s my personal opinion, but that’s not the point. That’s why we’re having this discussion,” Peter Kerstens told Cointelegraph during a fireside chat at the WAIB Summit Monaco 2026.
Kerstens, one of MiCA’s architects, said the feedback received during the European Commission’s current review period will help shape the European Union’s next regulatory steps.
MiCA is nearing the end of its transition period on July 1st, after which crypto service providers will have to retain their MiCA license or stop serving customers in the EU.
Related: Cryptocurrency companies face July 1st EU deadline as MiCA grace period ends
EU doesn’t need to regulate DeFi, says MiCA architect
Decentralized finance (DeFi) protocols were among the new risk areas considered in the consultations, even though they are well beyond the current scope of MiCA.
Excerpt from the public consultation on the MiCA review. Source: European Commission
However, Carstens said DeFi is difficult to regulate because laws can apply to individuals and organizations, but not directly to computer networks. He said lawmakers will need new legal doctrine to regulate nonentities.
Kerstens described DeFi as a “movement” that has “no representation,” adding that it does not need to be regulated.
“I don’t know what the problem is. If there’s no problem, why should it be regulated?”
In early March, a European Central Bank working paper questioned whether decentralized autonomous organizations (DAOs) are sufficiently decentralized to remain outside the scope of MiCA. The paper examined Aave, MakerDAO, Ampleforth, and Uniswap and found that the top 100 governance token holders control more than 80% of each protocol’s supply, based on holding snapshots from November 2022 and May 2023.
The authors said these findings call into question whether DAOs are inherently decentralized and whether they should remain outside of MiCA regulation as “fully decentralized” services.
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