European Commission Launches MiCA Review: What the Industry Needs to Know

On 20 May 2026, the European Commission launched a targeted consultation on the review of MiCA. The consultation will remain open until 31 August 2026.

The process is part of the formal review obligations embedded within MiCA itself:

• Article 142 requires the Commission to assess developments not originally covered by MiCA
• Article 140 requires a broader review of the regulation’s effectiveness and practical application

This is therefore not an unexpected policy initiative, but the beginning of what many market participants are already referring to as “MiCA 2.0.”

In practice, the Commission is asking a fundamental question:

“Now that MiCA is live, does it still work for the market we are moving into?”

Although the consultation is formally led by the European Commission, ESMA is deeply involved in the process.

Over the past two years, ESMA has become one of the key institutions shaping how MiCA functions in practice. While the Commission establishes the legislative framework, ESMA develops much of the operational guidance, supervisory standards, and interpretation that firms ultimately need to follow.

This consultation therefore also serves as a way for ESMA and EU regulators to assess whether the current framework is practical, competitive, and sustainable as the market evolves.

1. Assessing Whether MiCA Works in PracticeKey focus areas include:

Regulators now have their first real-world experience with MiCA implementation. The consultation aims to identify where the framework works effectively and where firms still face uncertainty, complexity, or inconsistent interpretation across EU jurisdictions.

2. Preparing for the Next Phase of Crypto Regulation

Key focus areas include:

Many of these areas were intentionally left outside the original MiCA framework. ESMA and the Commission are now evaluating whether additional legal clarity or dedicated regulation will be required as institutional adoption of digital assets continues to grow.

3. Strengthening Europe’s Competitive Position

Key focus areas include:

The EU wants MiCA to remain a global benchmark without making Europe less attractive for digital asset businesses. The consultation clearly reflects concerns about balancing financial stability and investor protection with innovation and international competitiveness.

For firms operating in digital asset markets and trading infrastructure, several parts of the consultation could directly impact future business models, compliance obligations, and market structure.

Stablecoins Could Face Major Recalibration and Token Classification Remains a Key Issue

The Commission is openly questioning whether the current stablecoin framework is overly restrictive, particularly given that no ARTs (Asset-Referenced Tokens) have yet been authorised under MiCA. This suggests regulators may consider adjustments to make the framework more commercially viable while still preserving financial stability safeguards

Classification of tokens remains one of the most operationally significant issues because it directly affects licensing, conduct, custody, disclosure, and capital obligations. The fact that regulators continue to seek feedback in this area shows that supervisory uncertainty still persists across the market.

DeFi Is Moving Closer to Regulation

Key focus areas include:

• Staking
• Lending and borrowing
• Decentralised protocols
• On-chain financial services
• Legal certainty for DeFi activities

While MiCA initially avoided directly regulating DeFi, the consultation clearly indicates that EU policymakers are preparing for a future framework covering decentralised financial activities. At this stage, the priority appears to be understanding how these markets should fit into the broader EU financial system rather than imposing immediate regulation.

This consultation marks only the beginning of what is likely to become a multi-year regulatory process. Key milestones include:

Industry feedback around MiCA implementation has so far focused on several recurring issues:

• Stablecoin liquidity fragmentation
• Limited commercial attractiveness of ARTs
• Uneven implementation across EU jurisdictions
• Restrictive cross-border access rules
• High fixed compliance costs

One major concern has been the fragmentation of stablecoin liquidity within the EU market. Strict requirements for EU-authorised stablecoin issuance have reduced access to certain global stablecoins on regulated European platforms, raising fears that EU traders could become increasingly isolated from deeper international liquidity pools.

Market participants have also questioned the commercial viability of ARTs. Extensive reserve, governance, and redemption obligations, combined with restrictions on interest-bearing structures, have significantly reduced the attractiveness of these products from a business perspective.

At the operational level, firms continue to report inconsistent implementation across member states despite MiCA’s harmonisation objectives. Differences in supervisory approaches, local “gold-plating,” and varying transitional timelines have complicated passporting and cross-border expansion strategies.

Finally, many smaller firms argue that MiCA imposes disproportionately high fixed compliance costs. Governance requirements, whitepaper obligations, audits, and reporting standards can create substantial pressure on lower-margin business models, particularly for small and medium-sized firms.