The European Commission is taking a second look at MiCA, the regulatory framework it spent years building. On Wednesday, the commission launched a public consultation asking the crypto industry and general public whether the Markets in Crypto-Assets Regulation needs updating, with responses accepted through Aug. 31.
What’s on the table
The consultation zeroes in on three areas where MiCA may need work: stablecoin interest restrictions, the treatment of decentralized finance, and classification gaps that leave certain digital assets in regulatory limbo.
The stablecoin piece is arguably the most consequential. Under MiCA, stablecoins fall into three buckets: asset-referenced tokens (ARTs), e-money tokens (EMTs), and a catch-all “other tokens” category. The regulation currently bans issuers from paying interest to stablecoin holders.
On the DeFi front, MiCA was written primarily with centralized crypto-asset service providers (CASPs) in mind. Decentralized protocols, which don’t have a neat corporate structure to regulate, were largely punted on. The consultation signals that the commission is now ready to grapple with the question it previously deferred: how do you regulate services that technically have no one in charge?
The classification gap issue is more technical but no less important. Some digital assets don’t fit cleanly into MiCA’s existing categories, creating uncertainty for issuers and exchanges trying to comply.
Timing and the July authorization deadline
MiCA only entered into force in June 2023. MiCA’s stablecoin-specific rules for ARTs and EMTs became applicable from June 30, 2024, while the broader CASP authorization framework kicked in from December 30, 2024. Crypto firms operating in the EU face a 2026 deadline to obtain full CASP authorization.
Circle has already positioned itself aggressively here, marketing both USDC and EURC as MiCA-compliant stablecoins across the European Economic Area.
The consultation also probes whether supervision of CASPs should be centralized under the European Securities and Markets Authority (ESMA), rather than remaining fragmented across national regulators.