Broadly known for its strict regulatory stance and cautious approach to innovation, the European Union (EU) hasn’t often led the charge in emerging technologies. When it has embraced digital transformation, its pace has lagged behind more agile territories, but it’s recently shown an uncharacteristic move towards digital transformation, with the introduction of the Markets in Crypto-Assets (MiCA) regulation. So, could this signal a potential turning point of the EU?
Regulation is squarely in Europe’s comfort zone, but becoming the first major economic bloc to implement a comprehensive cryptocurrency framework suggests a more forward-looking mindset than expected. It’s a notable departure from the EU’s usual regulatory conservatism and could be the foundation for a broader, more ambitious role in shaping global crypto policy. But to seize this opportunity, the EU must act decisively.
The future of crypto regulation and the EU
Since its inception, cryptocurrency has posed a challenge for regulators around the world. It defies traditional financial categories, and as such, regulation has been fragmented from the start. The European Union is the first territory to attempt to address that. While other countries, including the UK are still in the formative stages of developing a regulatory framework for crypto assets, and even the giants, like America, are choosing to tackle the issue with ad hoc enforcement and litigation, the EU has taken a decisive step in the form of MiCA. In place for over a year now, MiCA offers a level of clarity, consistency, and cohesion that no other jurisdiction has yet achieved. It’s not perfect, and its critics have been vocal, but it nevertheless stands as the most comprehensive effort yet to bring structure to the crypto space. In doing so, the EU has carved out a strategic advantage. This puts the EU in a very strong position. But it needs to go further.
Right now, MiCA covers the crypto basics; stablecoins and crypto-asset service providers (CASPs), harmonising rules on licensing, disclosures, and operations across all 27 member states. But there are still major gaps in its coverage. Decentralised finance (DeFi), non-fungible tokens (NFTs), and crypto staking all fall outside its scope, creating grey areas that threaten the effectiveness of the regulation. And that needs to be addressed. If the EU is going to cement its position as a global leader and enabler in the future of digital finance, it needs to move on with MiCA 2.0.
Are we ready for a new iteration of MiCA?
If Europe wants to develop its newfound status as a global leader in digital finance, MiCA cannot be static. The existing framework is a great starting place, but it must evolve. What’s needed is an expanded, adaptive version of MiCA, a 2.0, if you will, designed to keep pace with innovation rather than constrain it. This next iteration could serve as a universal rulebook for digital assets, closing existing loopholes, addressing grey areas, and providing a cohesive regulatory foundation for the EU’s market of over 400 million people.
With such a framework in place, the EU wouldn’t just be ahead of the curve, it could become the authority, as well as the world’s most attractive destination for crypto firms seeking long-term legal certainty. Just as importantly, it would offer much-needed security and clarity for investors, helping the crypto market distance itself from its dubious past and move further into the financial mainstream. Giving the EU’s policymakers a leading role in the future of global crypto asset standards in the process, building the position they established in 2016 with the General Data Protection Regulation (GDPR).
When GDPR was introduced, it was widely criticised as too complex and restrictive. Yet over time, it has become the global benchmark for data protection. Countries from Switzerland to New Zealand have adopted GDPR-inspired models, and international companies treat GDPR compliance as a global norm. Demonstrating the EU’s prowess in international regulation. It can do so again with crypto, but it needs to act soon.
How can the EU build on the potential of MiCA?
If the full promise of MiCA is to be unlocked, the EU must expand its focus to include the areas of the crypto ecosystem that remain outside of its current scope. That means moving beyond stablecoins and CASPS, and tackling the more complex sectors, starting with DeFi, staking, and NFTs. Each of these areas presents unique regulatory challenges, whether it’s the lack of classification, as with staking, or the ambiguity of legal treatments, as with NFTs. It’s a complex undertaking, and it’s easy to understand why the EU excluded them from MiCA’s initial scope. But that is no longer sustainable. If the EU wants to lead, it must be prepared to address these sub-sectors too.
Another area that needs to be addressed with some urgency is enforcement. Regulation is only meaningful when it is consistently applied. MiCA aims to create consistent rules across all 27 member states, but the EU’s regulatory track record shows that implementation can vary widely in practice. Without strong and uniform supervision, the credibility of MiCA could quickly erode.
The evolution of crypto regulation
MiCA has positioned the EU as a global leader in crypto regulation. But that will only last if Europe build on that momentum. Other territories are already making moves. The UK’s Financial Conduct Authority (FCA) is preparing to roll out a new crypto regulatory framework in 2026. If they learn from MiCA’s lessons, they could produce a more agile and appealing model that could easily outshine the original. And the United States may currently be stalled by political gridlock, but a new administration could quickly change that. When it does, the US has both the global influence and firepower to accelerate regulatory development. So, although there’s no denying that the EU currently holds an edge, with a vast, integrated market and an established regulatory infrastructure, if it wants to maintain it, it must act soon.
With MiCA and GDPR, the EU has shown the world what it’s capable of, but now os not the time for complacency. Taking an early lead doesn’t guarantee a strong finishing position. To stay ahead, the EU must now develop a broader, future-proof framework that strikes the right balance between fostering innovation and protecting investors. Building trust and transparency across the digital asset ecosystem, while offering clear guidance for both industry and regulators. If it can do that, the EU can play a significant role in carving a safe, secure future for crypto assets within the wider financial ecosystem.
Peter Curk, pictured, is CEO of ICONOMI, a platform in digital asset management. With a background in finance and blockchain, Peter is passionate about making crypto investing accessible for everyone.
Under his leadership, ICONOMI has grown into a trusted name in the industry, offering innovative solutions for individuals and institutions.
Image: Peter Curk, CEO of ICONOMI. Credit: ICONOMI
