EU Consultation Targets Stablecoin Interest and DeFi Classification

The European Union is taking a closer look at its own crypto rulebook as part of a formal consultation aimed at rewriting sections of the Markets in Crypto-Assets Regulation (MiCA).

The consultation targets two areas where the current framework is seen as incomplete: stablecoin interest rules and classification gaps around decentralized finance.

Stablecoins pegged to traditional currencies have exploded in use across Europe and beyond, while DeFi platforms continue to grow. However, the rules governing these areas are murky at best.

The EU's concern with stablecoin interest is that it can trigger a run on unregulated entities offering yield to holders. Regulators want to understand how this risk works in practice and what guardrails might make sense.

Regarding DeFi classification, the sector does not map cleanly onto existing financial categories, creating a regulatory headache for the EU.