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Europe prepares to regulate DeFi in 2026, while MiCA leaves the sector in a state of uncertainty.🔸✨🔸✨🔸✨🔸✨
Europe plans to regulate decentralized finance in 2026, while lawmakers still struggle to define decentralization under MiCA, according to an expert in crypto policy from the European Union.
European lawmakers have yet to define "decentralization," even as regulators begin to prepare for decentralized finance (DeFi) to become a key focus of cryptocurrency policy in 2026.
The world's first comprehensive regulatory framework for the cryptocurrency industry, the Markets in Crypto-Assets Regulation (MiCA), will come into force on December 30, 2024. Among its objectives are to enhance investor protection, prevent fraud, and address the management of stablecoin reserves.
But as MiCA enters its final phase of implementation, lawmakers are shifting their attention to regulating DeFi, where many questions remain unanswered, according to Vyara Savova, senior policy lead at the European Crypto Initiative (EUCI).
In a statement during the Chain Reaction X Spaces program by Cointelegraph on June 4, Savova said that DeFi protocols remain in a regulatory limbo.
The implementation of the framework leaves ambiguity around DeFi protocols, as "DeFi is theoretically outside the scope of MiCA,"