EU opens MiCA review on stablecoin interest ban, DeFi gaps

The European Commission has opened a public consultation to review the Markets in Crypto-Assets Regulation (MiCA), asking whether the bloc should lift or amend the ban on interest-paying stablecoins and close oversight gaps for decentralized finance, staking, lending and tokenized assets.

The consultation is open until Aug. 31 and asks industry participants and the public whether MiCA remains fit for purpose after taking effect in 2024. The Commission noted that crypto markets and the global regulatory environment have “continued to evolve” and has issued a targeted questionnaire to collect detailed feedback on how the rules are functioning in practice.

The questionnaire seeks views on classification challenges that have emerged since MiCA’s rollout, including the blurred boundary between crypto assets and traditional financial instruments. It highlights wrapped tokens, synthetic assets and tokenized fund interests as examples where legal status under EU law can be unclear.

Stablecoins receive special attention. The review revisits MiCA’s current prohibition on interest or interest-like remuneration for stablecoins and asks whether that restriction should remain or be changed. The consultation also covers reserve rules, liquidity-management arrangements, holders’ redemption rights and the thresholds used to designate a token as “significant.”

Respondents are invited to comment on areas that MiCA initially left largely outside its scope, including decentralized finance platforms, staking and lending activities, and non-fungible tokens. The questionnaire addresses the role and supervision of crypto asset service providers (CASPs), market integrity and investor protection. It also asks whether compliance rules can be simplified without weakening safeguards.

The review includes questions designed to measure consumer understanding and confidence in digital assets. The Commission asks how well ordinary users recognize and trust Bitcoin, Ether, stablecoins, DeFi services and tokenized assets, and what measures would increase consumer confidence, such as stronger protections, clearer rules, enhanced supervision or easier access to crypto services through regulated banks and payment providers.

Some industry participants have started referring to potential updates as “MiCA 2.” The Commission’s dual approach — a public consultation alongside a targeted questionnaire — aims to capture broad public sentiment together with technical feedback from market participants and supervisors.

MiCA entered into force in 2024 as the EU’s regulatory framework for crypto assets, setting rules on issuer obligations, transparency, governance and market conduct and placing specific limits on stablecoins. The review comes ahead of a July 2026 transitional deadline when CASPs operating in the EU must be fully authorized under the framework or stop operating. Responses to the consultation will inform whether the Commission proposes any adjustments to the regulation.