EU Shifts Focus to Tokenization as MiCA Review Continues

The European Union is shifting its focus towards tokenization and a broader digital asset framework, rather than extending MiCA to govern decentralized finance (DeFi). This move was indicated by an adviser to the European Commission, who emphasized the value of gathering stakeholder feedback during the ongoing consultation process.

Peter Kerstens, one of MiCA's principal architects, stated that he does not believe MiCA is inherently outdated. However, he stressed the importance of harnessing stakeholder input to inform future policy choices. The EU's public consultation on MiCA remains open until August 31, with policymakers weighing the future direction of the bloc's crypto rules.

The MiCA framework is approaching a critical deadline: the transitional period ends on July 1, after which crypto asset service providers must secure a MiCA license to continue serving EU clients or risk halting operations within the bloc. Regulating DeFi directly remains legally and technically challenging, as regulators must address entities and people rather than networks or protocols themselves.