DeFi, not MiCA II on the forefront

European lawmakers have but to outline have but to outline “decentralization,” whilst regulators start getting ready for decentralized finance (DeFi) to change into a key focus of crypto coverage in 2026.

The world’s first complete regulatory framework for the crypto business, the Markets in Crypto-Property Regulation (MiCA), went into impact on Dec. 30, 2024. Amongst its goals are to spice up investor safety, forestall fraud and handle stablecoin reserve administration.

However as MiCA enters its closing implementation section, policymakers are shifting their consideration to regulating DeFi, the place many questions stay unresolved, in line with Vyara Savova, senior coverage lead on the European Crypto Initiative (EUCI).

Talking throughout Cointelegraph’s Chain Response X Areas present on June 4, Savova mentioned DeFi protocols stay in regulatory limbo.

The framework’s implementation leaves ambiguity round DeFi protocols, as “DeFi is theoretically outdoors the scope of MiCA,” Savova mentioned, including:

“Nobody truly is aware of what EU policymakers imply by DeFi.”

Savova mentioned that beginning round mid-2026, authorities within the bloc will begin decoding methods to legally outline decentralization.

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The preliminary MiCA framework obtained important criticism for its gaps associated to decentralized protocols, because it required DeFi platforms to stick to the identical licensing and Know Your Buyer (KYC) necessities as conventional monetary providers corporations. 

Nevertheless, a provision to the invoice, Recital 22, talked about that “totally decentralized” crypto-asset service suppliers “shouldn’t fall inside the scope of this Regulation.”

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MiCA 2 shouldn’t be taking place: EU crypto coverage skilled

Whereas MiCA’s closing implementation went dwell on the finish of 2024, lawmakers are nonetheless conducting revisions each 12 to 18 months associated to potential gaps within the regulation.

But regardless of many earlier calls from Christine Lagarde, president of the European Central Financial institution, the MiCA II framework is not going to be transferring ahead within the area, in line with Marina Markezic, government director and co-founder of EUCI:

“You’ve got in all probability heard a few potential MiCA II. It’s not taking place.”

She added that ongoing discussions about stablecoins might lead to focused legislative updates fairly than a full sequel to MiCA.

In the meantime, the EU has but to roll out new Anti-Cash Laundering guidelines that can prohibit the usage of privateness cash and nameless crypto accounts. These provisions are scheduled to take impact in 2027.

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