The European Commission is asking the crypto industry for feedback on whether to expand its Markets in Crypto-Assets regulation. This would bring several areas currently outside MiCA’s scope under the same rules. These areas include decentralised finance (DeFi), non-fungible tokens (NFTs), staking, lending, prediction markets, and tokenized deposits.
Why the scope is being reconsidered
MiCA currently exempts services that are fully decentralized from regulation. But policymakers are growing concerned that DeFi has grown so fast that the assumptions behind that exemption no longer hold. The biggest challenge is that there’s still no agreement on how to define decentralization. It is hard to tell which protocols truly operate without any central control.
Regulators are looking at ways to figure out whether protocols are really decentralized. One idea being considered is that crypto firms should only connect users to DeFi applications that have been certified or vetted. The consultation also explores setting up certification schemes for DeFi protocols, smart contracts, and non-custodial wallet providers.
Filling regulatory gaps
Policymakers are also revisiting other regulatory gaps that have existed for a while. These include crypto lending and borrowing, NFTs, prediction markets, and perpetual futures. A key question is whether some of these activities should fall under MiCA or the stricter MiFID framework, which covers traditional financial instruments.
Tokenized deposits under scrutiny
On tokenized deposits, regulators are looking at a wide range of use cases. These include cross-border payments and atomic securities settlement. The big question is whether the existing banking framework already covers these activities well enough, or if new rules are needed.
The consultation is open until August 31, 2026. Industry participants have until then to submit their responses.
