Foreign media report that, as the transition period for the EU’s Markets in Crypto-Assets Regulation (MiCA) nears its end, European crypto regulation will not be finalized. Legal and regulatory expert Lukáš Kovarik, who was interviewed, believes that even after MiCA fully takes effect in July, the EU will continue to refine rules around stablecoins, DeFi, asset tokenization, and regulatory jurisdiction.
July marks the full implementation.
Currently, the EU is in the MiCA transition phase with "grandfathering" provisions, which expire on July 1. After the transition period ends, only institutions holding a MiCA license will be permitted to conduct related business within the EU market. This means MiCA will shift from transitional arrangements to a more comprehensive, unified regulatory framework.
Regulatory authority remains to be clarified.
Kovarik stated that regulatory models for crypto-asset service providers are still under discussion at the European legislative level. A key issue is whether regulatory authority should remain with individual member state authorities or be further centralized under the European Securities and Markets Authority (ESMA).
He also noted that the European Union is considering expanding its distributed ledger technology (DLT) pilot scheme, which is primarily designed to support the issuance of securities on DLT-based infrastructure; an expanded scope could provide additional testing opportunities for a broader range of financial assets to be tokenized.
- The European Commission has launched a public consultation on the MiCA review.
- The discussion covers stablecoins, DeFi, and tokenization.
- The cryptocurrency service provider's rules are also being evaluated for potential updates.
Stablecoins and taxation are drawing attention
Kovarik believes that the EU once gained attention for MiCA’s clearer regulations, but the U.S. and parts of Asia have recently been advancing digital asset policies, increasing competitive pressure on Europe.
In his view, the EU still lags behind in regulating the issuance and trading of stablecoins and lacks sufficiently clear rules for broader asset tokenization. To remain attractive, existing regulations must continue to be revised.
In addition to the regulatory framework, he noted that the European digital asset tax system is fragmented, with varying tax treatments among member states and inconsistent accounting standards, increasing the complexity for businesses operating across borders and launching products.
Regarding the practical impact of MiCA, he believes that the licensing system helps enhance transparency and market trust, and provides a more stable compliance foundation for institutional investors entering the European crypto market.
Additional information: Kovarik also noted that the European Central Bank plans to advance the digital euro project, which could play a more significant role in the design of Europe’s digital asset regulation and payment systems in the coming years.