The European Union's Markets in Crypto-Assets (MiCA) regulation is now in full effect, but the European Commission has initiated a consultation to assess if it needs updating due to the market's evolution since its drafting between 2020 and 2023. Stablecoins have become central to global payments, a shift not fully anticipated when MiCA was written, which focused more on crypto-asset service providers (CASPs). Industry experts note that while MiCA achieved its original goals, such as authorizing around 20 euro-denominated stablecoins, its reserve rules requiring minimum bank deposits may need adjustment. The Commission is also considering an equivalence regime for foreign frameworks and addressing multi-issuance structures to enhance cross-border circulation of stablecoins. The review aims to balance global liquidity with consumer protections, as blockchain finance expands into tokenization of real-world assets. The consultation reflects a recognition that MiCA, as a first-generation framework, requires periodic updates to remain competitive with newer regulations in other major markets like the U.S. and Hong Kong.

Key facts

• EU Commission consults on MiCA updates due to market evolution since 2023.
• Stablecoins now central to global payments, not fully addressed in original MiCA.
• MiCA's reserve rules for stablecoins, like bank deposits, may need revision.
• Commission considers equivalence regime to allow foreign stablecoins in EU.
• Blockchain finance expands beyond stablecoins into tokenization of assets.