Participants are invited to comment on the appropriateness of MiCA by 31 August 2026.

By Axel Schiemann, Thomas Vogel, Lasse Winzer, Stuart Davis, and Gabriel Lakeman

Key Points:

  • The European Commission is reviewing MiCA’s suitability through a targeted public consultation, open for comment until 31 August 2026.
  • The review focuses on major policy questions, including the treatment of tokenised financial instruments, the regulation of stablecoins, and the adequacy of the framework for cryptoasset service providers.
  • Participants will consider whether emerging activities such as DeFi, staking, lending, and tokenised deposits should be brought within a broader and more coherent EU regulatory regime.

On 20 May 2026, the European Commission launched a targeted consultation on the review of the Markets in Crypto-Assets Regulation (MiCA)1 (the Consultation). Since its entry into force on 29 June 2023, MiCA has served as the central EU regulatory framework governing cryptoasset issuers and cryptoasset service providers. The Consultation seeks to evaluate whether this framework continues to be appropriate given recent market, product, and technological developments. The evaluation features 86 questions and targets a specialised audience, including digital asset industry representatives and public authorities such as supervisors, central banks, and ministries of finance. In addition, the Commission published a public consultation for individuals.

Reassessing the Regulatory Perimeter: MiCA, MiFID, and Traditional Financial Market Law

A central aspect of the Consultation addresses whether tokenised financial instruments should remain subject to existing securities and banking supervisory law or whether they should be integrated more closely into the MiCA framework, with particular focus on tokenised financial instruments, hybrid tokens, wrapped assets, tokenised fund units, tokenised money market instruments, governance tokens, and synthetic exposures. This represents a significant step towards establishing clear regulatory boundaries between MiCA and existing financial market legislation such as MiFID.

Emphasis on Regulating Stablecoins, EMTs, and ARTs

The Consultation places particular emphasis on regulating stablecoins, notably e-money tokens (EMTs) and asset-referenced tokens (ARTs). The Commission invites stakeholders to provide views on the prospective role of stablecoins, including how they are used in international payments, wholesale payments, settlement of tokenised financial instruments, and programmable financial services. The review further extends to own funds requirements, reserve and liquidity requirements, redemption rights, significance thresholds, and the overall adequacy of the current stablecoin regime.

CASPs: Scope of Services, Business Models, and Investor Safeguards

Another key area of the Consultation concerns the regulatory framework for cryptoasset service providers (CASPs). The Commission is examining the scope of regulated services, transparency and marketing requirements, investor protection, reporting obligations, and cross-border enforcement to ensure the supervisory framework remains aligned with the rapidly evolving cryptoasset market and continues to provide adequate safeguards for investors throughout the EU.

New Cryptoasset Activities Under Review

The Consultation addresses whether activities not yet fully captured by MiCA should be brought within a more comprehensive regulatory perimeter. This covers DeFi applications, staking, lending, and borrowing, as well as potential requirements applicable to access points such as CASPs, wallets, or interfaces to DeFi protocols. Moreover, it encompasses inter alia, due diligence obligations, liability issues, certification models, and risk management for protocols with links to illegal activities.

Additionally, the Consultation addresses tokenised deposits and their treatment under private law, covering use cases such as atomic settlement, on-chain collateral, and programmable payments. It also examines questions of ownership, transfer, custody, insolvency remoteness, and security interests, which are vital for international banks’ tokenisation strategies and their integration into existing CRD/CRR and deposit guarantee structures.

Looking Ahead

The scope of the Consultation reflects the Commission’s ambition to establish a coherent supervisory framework for activities that have so far remained unregulated or only partially addressed. Indeed, the outcome of this review may lead to legislative amendments to MiCA and related regulations. Stakeholders and market participants are invited to submit their feedback by 31 August 2026.

Latham & Watkins will continue to monitor and report on developments related to the MiCA review.