EU Opens MiCA 2.0 Consultation on Stablecoins and DeFi

EU Opens MiCA 2.0 Consultation – Stablecoins and DeFi Rules Under Review

Key Takeaways

• The European Commission has opened a consultation to revise its Markets in Crypto Assets regulation, informally referred to as MiCA 2.0.
• The review covers regulatory scope, stablecoin requirements, crypto-asset service providers and areas not addressed in the original framework, including DeFi and prediction markets.
• Industry representatives are calling for adjustments to stablecoin reserve rules and restrictions on incentives.
• The consultation period runs until August 31, and legislative changes are not expected before 2028.

European Commission Seeks Feedback on MiCA Revisions

The European Commission has launched a formal comment period to gather feedback on potential changes to its Markets in Crypto Assets regulation. The initiative follows the full application and enforcement of MiCA, which began on December 30, 2024, with the first licenses issued in early 2025.

MiCA created a harmonised regulatory framework for crypto assets across European Union member states. It introduced a single rulebook designed to provide consumer protection and legal clarity for crypto businesses operating across the bloc.

The current consultation is widely described within the industry as the first step toward what could become MiCA 2.0. According to the Commission, the review is divided into four main areas: the regulatory scope and definitions for crypto assets other than asset-referenced tokens and e-money tokens, requirements for e-money tokens and asset-referenced tokens and their issuers, the legal framework for crypto-asset service providers, and topics not covered in the initial regulation, including decentralised finance and prediction markets.

For crypto users and platform operators, the outcome of this review may determine how services involving stablecoins, decentralised protocols or event-based markets are treated under EU law.

Stablecoins at the Center of Regulatory Debate

The section addressing e-money tokens and asset-referenced tokens is considered one of the most significant parts of the consultation. Stablecoins fall within these categories under MiCA.

Regulatory treatment may depend on how stablecoins are used in practice. If authorities view them mainly as trading instruments, the focus is likely to remain on investor protection and market integrity. If they are treated as payment infrastructure, supervisory attention could shift toward redemption rights, liquidity management, reserve composition, operational resilience and reporting obligations.

Catarina Veloso, director of regulatory and compliance at Notabene, stated that the risks associated with stablecoins depend on their scale, user base and links to other parts of the financial system. This functional approach could influence how detailed future requirements become.

Industry participants are also calling for targeted adjustments. Katie Harries, director and head of policy for Europe at Coinbase, said refinements could make euro-denominated stablecoins more competitive. She highlighted reserve rules, rewards and the so-called multi-issuance model as areas for recalibration.

Under the current MiCA framework, issuers of e-money tokens are prohibited from offering interest. According to Veloso, this restriction may reduce the competitiveness of euro stablecoins and potentially shift users toward foreign-currency stablecoins or yield structures outside the regulated framework. Harries indicated that non-interest incentives such as cashback or loyalty programs could be considered as an alternative, noting that such features are common in traditional payment services.

For users of crypto betting or iGaming platforms that rely on stablecoin payments, any changes to issuance, reserve management or incentive rules could affect which tokens are available and under what conditions they are offered within the EU.

Defining DeFi and Responsibilities of Service Providers

MiCA currently does not apply to fully decentralised crypto-asset service providers operating without intermediaries. However, the consultation signals that regulators are examining whether and how decentralised finance should be addressed.

Veloso noted that decentralisation is rarely binary. Policymakers must determine which indicators are relevant when assessing whether a platform is genuinely decentralised. Potential factors include control over protocol governance, possession of administrative keys, influence over front-end interfaces, revenue capture mechanisms and the ability to upgrade or modify smart contracts.

Miroslav Đurić, senior associate at Taylor Wessing, pointed out that many regulated crypto-asset service providers already connect clients to decentralised finance platforms. Because these platforms fall outside MiCA, regulators are now considering whether service providers should conduct due diligence before granting access.

One option under discussion would allow service providers to connect clients only to decentralised platforms that meet certain certification standards under a potential new regime. Such a move would affect how centralised exchanges and intermediaries integrate decentralised products.

Prediction Markets Face Overlapping Regulatory Questions

The consultation also addresses prediction markets, which were not covered explicitly in MiCA 1.0. Currently, there is no unified regulatory structure for such platforms in the EU, and they are banned in some member states.

The Commission is seeking feedback on whether prediction markets provide economic benefits to consumers and whether they fall under MiCA or the Markets in Financial Instruments Directive. According to Đurić, the regulatory classification will depend on the nature of the event contracts offered.

Depending on contract design, a platform operator could fall under multiple frameworks, including financial market regulation, gambling law or crypto asset regulation. For operators and users in the crypto betting sector, this distinction is particularly relevant, as it may determine licensing requirements and cross-border availability.

Timeline and Legislative Outlook

The comment period for the consultation runs until August 31. Stakeholders from across the crypto industry have indicated that they plan to remain engaged throughout the process.

However, legislative change at the EU level typically involves lengthy procedures. According to Đurić, given the complexity of the issues raised, concrete legislative proposals are unlikely to be adopted before 2028.

Until then, the current MiCA framework remains in force, including its provisions on stablecoin issuance, licensing of crypto-asset service providers and consumer protection measures.

Our Assessment

The European Commission’s consultation marks the first formal step toward revising MiCA after its full implementation in late 2024. The review focuses on stablecoins, decentralised finance, crypto-asset service provider obligations and prediction markets – areas that have gained prominence since the original framework was drafted.

For crypto users and operators, including those active in crypto-based betting and online gambling, the process may clarify how stablecoins can be structured, how decentralised platforms are assessed and which regulatory regimes apply to event-based markets. Any legislative amendments are expected to follow an extended EU process, with potential adoption not anticipated before 2028.