Public consultation through Aug. 31 could reshape euro stablecoin competition, staking regulation, and DeFi classification under MiCA. 37 banks now back Qivalis.
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The European Commission launched a public consultation on the Markets in Crypto-Assets Regulation (MiCA) on May 20, putting restrictions on stablecoin interest payments, decentralized finance classification, and staking rules up for potential revision. The consultation runs through Aug. 31 and could pave the way for a second-generation framework that industry observers already call “MiCA 2.”
Since the regulation took effect in 2024, crypto markets have shifted into areas that MiCA addressed only partially or excluded entirely. The Commission said global markets and international regulatory standards have evolved significantly, prompting the review. The outcome will determine whether Europe becomes a competitive venue for digital asset innovation or a jurisdiction where compliance costs drive activity offshore.
One of the most closely watched items in the consultation is the prohibition on interest payments tied to stablecoins. Industry participants argued this restriction weakened the competitiveness of euro-denominated stablecoins relative to U.S. dollar stablecoins, which face no equivalent ban in other major jurisdictions. The Commission is reassessing whether the ban serves its intended purpose of preventing stablecoins from becoming deposit-like products.
Key insight: The interest payment prohibition created a structural disadvantage for euro stablecoins versus dollar-pegged rivals. Any relaxation would be the single biggest regulatory catalyst for the European stablecoin market.
Regulators are also examining reserve requirements, liquidity management standards, and redemption rights for stablecoins. Current MiCA rules require issuers to hold at least 30% of reserves in deposits at credit institutions, a rule that many firms consider excessive. The consultation may lead to adjustments that make euro stablecoins more competitive while maintaining systemic stability.
The table above summarises the major questions. If the prohibition on interest payments is relaxed, euro stablecoins could offer yields, potentially attracting capital away from bank deposits and money market funds. If the ban remains and reserve requirements tighten, euro stablecoins may struggle against better-capitalized dollar stablecoins issued by non-EU entities.
Decentralized finance largely sits outside MiCA’s current scope. The Commission is now seeking input on staking, lending, tokenized assets, and decentralized protocols as regulators attempt to determine how these markets should fit into Europe’s broader financial framework.
Staking services allow users to earn yields by locking tokens to help secure proof-of-stake networks, operate under regulatory uncertainty in the EU. The consultation asks whether staking should be treated as a separate crypto-asset service under MiCA or regulated under existing financial instruments rules. A stricter classification could impose prospectus requirements and operational licenses on platforms offering staking to European clients.
The consultation highlights growing concern around wrapped tokens, synthetic assets, and tokenized fund products that blur the line between crypto-assets and traditional financial instruments. These products may fall between MiCA and other EU financial regulations, creating regulatory arbitrage opportunities. The Commission is examining whether a unified classification framework is needed.
What this means: DeFi protocols operating in Europe face an uncertain timeline. The Commission’s review could bring them under formal authorization requirements, altering risk profiles for liquidity providers and users.
By July 2026, crypto asset service providers (CASPs) must either secure full authorization under MiCA or stop operating within the EU. That timeline adds urgency to the consultation. Any changes to the rules before that date could shift the cost and complexity of compliance.
Firms currently operating under transitional regimes in member states face a binary choice. If the review tightens rules for stablecoins, DeFi, or staking, some providers may need to restructure their European offerings or exit the market. Conversely, clarification of gray areas could unlock new product development, particularly in euro-denominated stablecoins.
The Commission will analyze feedback after Aug. 31 and publish legislative proposals. The process could take 12–18 months, meaning final rules may arrive just before the July 2026 deadline.
The review arrives alongside a significant industry development: 25 additional banks have joined Qivalis, a European stablecoin initiative now backed by 37 financial institutions across 15 countries. Qivalis aims to create a compliance-first euro stablecoin infrastructure that would directly compete with dollar-pegged incumbents.
If the Commission relaxes the interest payment ban, Qivalis and similar initiatives could offer yields, accelerating adoption. If the ban remains and reserve requirements tighten, euro stablecoins may struggle to gain traction.
Traders tracking this review should watch for concrete signals from the Commission after the feedback period. The following factors would either reduce or increase regulatory risk for crypto firms and assets in Europe.
The European debate mirrors global discussions. In the United States, SEC Commissioner Hester Peirce has warned against hype over the SEC’s tokenized stock exemption, signaling similar classification challenges. The EU’s decisions will influence other jurisdictions and may set a template for future harmonization.
The consultation remains open until Aug. 31. The Commission’s first legislative drafts could appear by early 2026. For traders holding euro-denominated stablecoins or DeFi positions, the direction of this review will determine whether Europe becomes a competitive market for crypto innovation or a jurisdiction where compliance costs drive activity offshore. The July 2026 deadline for CASP authorization is the hard line on the calendar.
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