In May, the European Commission launched a comment period asking for views on regulations affecting the cryptocurrency and blockchain industries.
The comment period will precede possible changes and additions to the Markets in Crypto Assets (MiCA) legislative framework. Some have already dubbed the expected fresh framework “MiCA 2.0.”
Katie Harries, director and head of policy for Europe at Coinbase, told Cointelegraph that there are several key areas where “improvements could help ensure the framework remains competitive in the next phase of digital asset regulation.”
With an updated version of EU crypto law, the crypto industry is looking for greater regulatory clarity around DeFi, stablecoins and tokenization.
MiCA was just the first step
Full application and enforcement of MiCA began on December 30, 2024, with the first licenses issued in the first months of 2025.
Although the legislative process was long and elaborate, the EU still managed to create a regulatory framework for cryptocurrencies, ahead of the United States. Per Harries: “MiCA helped establish an early global benchmark for digital asset regulation and gave the EU a first-mover advantage.”
This represented an “important first step” for the EU, which has created a “single harmonized set of rules on cryptocurrencies” among its member states. “It has provided greater protection and transparency for consumers, while providing businesses with the regulatory clarity they need to build, invest and grow across the EU.”
Harries said that for Coinbase, MiCA has provided a foundation from which it can expand its business in Europe into “the next phase of adoption in both the retail and institutional markets.”
Now Brussels plans to recalibrate its landmark legislation. The consultations are divided into four parts:
- Regulatory scope and definitions of crypto assets other than reference tokens (ART) and electronic money tokens (EMT)
- Requirements for EMT, ART and their publishers
- Defining the legal framework for crypto asset service providers (CASPs)
- Topics that MiCA 1.0 did not cover, such as DeFi and prediction markets
The stablecoin discussion has regulatory implications
Per Catarina Veloso, Chief Regulatory and Compliance Officer at By the way, part 2 which affect stablecoins, is “the longest and probably most politically charged part of the consultation.”
How stablecoins are used, whether as a primary retail payment instrument, a wholesale settlement platform, or as a “complement to existing payment methods for cross-border payments”, could have a significant impact on how stablecoin policy is shaped.
“If stablecoins are treated primarily as crypto trading instruments, the focus will likely remain on investor protection and market integrity. If they are treated as payment infrastructure, then redemption, liquidity, reserve management, operational resilience and supervisory reporting will become much more important.”
What risks they carry “depend largely on how they are used, on what scale, by whom and in connection with what parts of the financial system.”
Harries said Coinbase would like MiCA 2.0 to “increase the competitiveness of euro stablecoins by recalibrating rules around reserves, rewards and the multiple issuance model.” Allowing a larger portion of stablecoin reserves to be held in “high-quality sovereign assets could reduce risk without compromising security.”
Another aspect is stablecoin rewards. Currently, EMT issuers are prohibited from offering interest. However, according to Veloso, “this could undermine the competitiveness of euro-denominated stablecoins and push users either towards foreign currency stablecoins or towards yield structures outside the regulated area.”
Harries said that “MiCA should enable non-interest incentives such as cash back and loyalty programs, which are standard features across all payments and help increase competition and consumer choice.”
Introducing DeFi markets and predictions
Currently, MiCA does not cover CASPs, which are fully decentralized and operate without any intermediary. Veloso noted that while it sounds basic, “decentralization is rarely binary.”
To create informed policy around DeFi, EU regulators need to know how to assess whether a CASP is fully decentralized and “what metrics should matter: control over the protocol, governance rights, administrative keys, front-end control, revenue capture, ability to modernize or the ability of identifiable individuals to influence outcomes.”
According to Miroslav Đurić, senior associate at Taylor Wessing, many CAPS already have to combine their clients using DeFi platforms. However, since these platforms are exempt from MiCA, regulators are now asking “whether CASPs should discharge their fiduciary duties to customers by performing due diligence on the DeFi platforms they make available to their customers.”
“The Commission appears willing to explore various approaches, including one that could allow CASPs to only connect their clients to certified DeFi platforms (under the new certification regime).”
Prediction markets are also a heated topic currently under consideration in the EU. There is currently no uniform regulatory structure and in some countries prediction markets are banned.
The Commission seeks comments from the Commission on whether they provide any economic benefit to consumers and whether they fall within the scope of MiCA or the Markets in Financial Instruments Directive (MiFD).
Đurić said this would depend on the nature of the contracts themselves. “Depending on the event contracts available on the platform […] a platform operator can easily become subject to requirements set out in different, sometimes conflicting regulatory frameworks: from MiFID II on gambling to the MiCA regulatory framework.”
What’s next?
Crypto industry observers say they intend to remain in dialogue with Brussels throughout the process. Harries said an effective fresh MiCA would require “dialogue between industry, policymakers and regulators, drawing lessons from how the framework works in practice and improving areas where greater transparency and flexibility can help support the next phase of growth across the region.”
The deadline for submitting comments is August 31, but Đurić said the entire process could take years.
“Given the level of complexity of the issues raised in the consultation, as well as the normal pace at which the EU legislative process moves, […] “it is tough to expect any specific legislative proposals to be adopted before 2028.”
