The EU is examining the need for updates to its crypto regulation MiCA in response to the evolving landscape shaped by stablecoins and tokenization.
By Jamie Crawley, AI Boost|Edited by Omkar Godbole Jul 1, 2026, 12:29 p.m. 4 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on (Antoine Schibler/Unsplash)SummaryShow- MiCA is officially in effect, yet the European Commission is already assessing which elements of the regulatory framework may require revisions.
- During the drafting of MiCA from 2020 to 2023, the primary focus was on exchanges and other crypto asset service providers (CASPs). Since then, stablecoins have gained prominence in global payment systems, prompting regulators to adapt their frameworks.
- Sebastian Barling, a financial regulation partner at Skadden, likened the EU's strategy concerning stablecoins to constructing a "fortress."
The European Union's (EU) transitional period for its Markets in Crypto-Assets (MiCA) regulation concluded on July 1, mandating that crypto-asset service providers (CASPs) without complete licensing under the framework cease their operations within the EU.
Even though MiCA is now operational in theory, the European Commission is already examining which areas of the regulatory framework may need to be updated. The executive branch of the EU started a consultation in May to evaluate if MiCA remains relevant in light of the cryptocurrency industry's evolution over recent years, particularly in comparison to newer regulations in other significant markets.
Patrick Hansen, Circle's director of EU strategy and policy, clarified that the consultation does not imply MiCA has failed.
"As the first comprehensive crypto regulatory framework globally, it was anticipated from the outset that it would undergo regular reviews in line with the rapid developments in the crypto-asset and stablecoin sectors," Hansen explained to CoinDesk.
"It is logical to regard it as a version one. Some aspects function well, and now we should revisit and modify those areas that may not be performing as effectively compared to other global frameworks," Hansen added.
First-mover Disadvantage
Stablecoins, which are tokens linked to the value of a traditional financial asset, typically a fiat currency, seem to exemplify an area where MiCA is functioning "less effectively" when compared to the GENIUS Act for stablecoin regulation in the U.S.
When MiCA was created between 2020 and 2023, lawmakers concentrated mainly on exchanges and CASPs. However, the popularity of stablecoins has surged in the global payments landscape, leading regulators to adjust their frameworks accordingly.
"CASPs were the primary focus during the drafting of MiCA due to rising concerns about various providers offering services without regulatory oversight, as crypto assets had not been regulated at that time," Eva Legler, a counsel for financial institutions regulatory at Skadden, stated to CoinDesk. "At that moment, stablecoins had not achieved the level of popularity they have today."
Regardless, Hansen noted that MiCA has met many of its initial objectives. Approximately 20 euro-denominated stablecoins have received authorization under the regime, with their adoption boosted by formal regulation.
However, he pointed out imperfections, such as reserve rules requiring minimum bank deposits. Attention is also shifting from domestic regulation to global oversight. Future policymaking may focus on enabling tokens regulated in one jurisdiction to be recognized in another through mutual recognition frameworks.
"We could leverage the global, internet-enabled nature of these assets instead of hindering their circulation with fragmented local regulations," he remarked.
The EU may have encountered a first-mover disadvantage in the regulation of crypto assets, lacking frameworks in major markets like the U.S. or Hong Kong to reference as there is now.
Fortress Europe
Sebastian Barling likened the EU's regulatory approach to constructing a "fortress."
"The consultation signifies a thorough review aimed at ensuring that the European regime aligns with international standards and maintains competitiveness," he shared with CoinDesk.
Barling and Legler discussed the Commission’s crucial shift towards assessing a third-country equivalence regime and managing cross-border multi-issuance arrangements in a recent article. They pointed out that while MiCA does not currently have a mechanism to defer to foreign frameworks, an equivalence regime could revolutionize the market by facilitating mutual recognition and allowing globally circulating stablecoins to be traded on EU exchanges.
At the same time, the Commission recognizes that multi-issuance structures are not explicitly banned. However, it is contemplating stronger redemption safeguards to protect EU consumers from unexpected liquidity crises and cross-border stress situations.
"Mandating distinct issuance and liquidity pools across jurisdictions risks compromising the efficiency that makes stablecoins valuable," Barling noted.
Another aspect of the Commission's MiCA review may involve acknowledging that blockchain finance is progressing beyond stablecoins into enabling functions like tokenization of real-world assets.
"I believe 2025 was largely the year of stablecoins," Barling stated. "This year, I've been focusing significantly more on the broader asset tokenization."
The challenge for the Commission will be to find a balance between opening the European market to global liquidity while maintaining the consumer protections that established MiCA as a worldwide standard.
"You cannot eliminate risk entirely, but the goal is to minimize it as much as possible, which will guide any amendments to MiCA," Legler concluded.
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