EU to Re-examine DeFi and Staking Regulations... Will Stablecoin Interest Ban Be Lifted?

▲ European Union, Cryptocurrency Regulation/AI-generated image

The European Union (EU) has begun a review of its cryptocurrency regulatory framework, MiCA (Markets in Crypto-Assets). The European Commission has initiated a public consultation on key areas including stablecoins, decentralized finance (DeFi), staking, and tokenized assets, aiming to assess whether the regulatory framework implemented in 2024 remains suitable for the rapidly evolving digital asset market.

NewsBTC reported on May 22 (local time) that the European Commission launched the public consultation on May 20. This process targets industry stakeholders, financial institutions, academia, consumer organizations, and the general public, with feedback being accepted until August 31. NewsBTC stated that this review could be the first step in a reform discussion that some in the industry are already calling 'MiCA 2'.

MiCA is the EU's first unified legal framework for cryptocurrencies, implemented in 2024. It was designed to regulate crypto-assets, stablecoins, issuers, and crypto-asset service providers, focusing on reducing regulatory fragmentation among EU member states and clarifying investor protection and compliance standards. However, since the rules were established, the cryptocurrency industry has rapidly expanded into areas that MiCA only partially addresses or entirely excludes.

One of the most notable areas in this review is stablecoins. The European Commission is evaluating the need for institutional improvements, stating that global markets and international regulatory standards have changed significantly since MiCA's introduction. In particular, it is re-examining the provision prohibiting interest payments on stablecoins. This restriction has drawn criticism from the industry for weakening the competitiveness of Euro-denominated digital assets compared to US dollar-based stablecoins.

The European Commission is also reviewing stablecoin reserve requirements, liquidity management standards, and redemption rights. Additionally, issues related to product classification that blur the lines between crypto-assets and traditional financial products, such as wrapped tokens, synthetic assets, and tokenized fund products, have been included in the consultation. This reflects the digital asset market's rapid shift towards complex product structures beyond existing regulatory categories.

DeFi is also a major subject of review. While DeFi largely remains outside the scope of MiCA, the European Commission is seeking feedback on staking, lending, tokenized assets, and decentralized protocols. Regulatory authorities are now in the process of determining how to address these markets within Europe's broader financial regulatory framework.

For cryptocurrency companies operating in Europe, this review could serve as a significant turning point. By July 2026, crypto-asset service providers must obtain full authorization under MiCA; otherwise, they must cease operations within the EU. In addition to technical compliance, the European Commission is also examining whether consumers understand crypto-asset products under the MiCA framework and what additional safeguards are needed to increase trust in regulated services. The results of this review are presented as a benchmark that could influence not only the European crypto market but also global regulatory discussions.

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