Reviewing MiCA: Cardano Foundation’s Response to the European Commission’s Public Consultation

The European Union’s Markets in Crypto-Assets Regulation (MiCAR) established one of the first comprehensive regulatory frameworks for crypto-assets. With the regulation now in application, the European Commission has launched a targeted consultation to assess whether the framework is able to deliver on its objectives and remains fit for purpose in light of practical implementation experience, evolving market structures, and international regulatory developments.

The consultation covers a broad range of topics, from the existing regulatory framework for crypto-assets – such as whitepaper and other disclosure requirements, stablecoins, and crypto-asset service providers –, to areas currently outside MiCAR’s scope, including decentralized finance (DeFi), staking, lending and borrowing, as well as some aspects of non-fungible tokens (NFTs). It also examines ways to improve legal certainty, reduce regulatory complexity, and strengthen the competitiveness of the European digital-asset market.

The Cardano Foundation submitted its response on 30 September 2026. We focused on a selection of topics we consider particularly relevant to public, permissionless infrastructure and the broader Cardano ecosystem. Across these topics, our recommendations reiterate the Foundation’s consistent stance on the importance of technological neutrality, proportionality, and a function-based regulatory approach. We again emphasize a key overarching principle: Regulation should follow the substance of an activity, the functions performed, and the risks created, not the technology through which it is conducted.

Read our full response here.

The Foundation’s Key Positions and Recommendations

Preserving a clear and predictable regulatory perimeter

One of the central questions in the consultation concerns the boundary between MiCAR and existing EU financial-services legislation, particularly MiFID II. While MiCAR regulates certain categories of crypto-assets, others may qualify as financial instruments and consequently fall under existing sectoral legislation. Determining which framework (if any) applies can be challenging, especially for crypto-assets combining different functions or characteristics.

The Foundation supports maintaining the existing distinction between MiCAR and traditional financial-services legislation, including MiFID II. Whether an asset qualifies as a financial instrument should depend on its substantive characteristics, not its technical representation. However, greater clarity is needed for hybrid tokens, evolving asset characteristics, and inconsistent interpretations across EU Member States. The objective should be to improve legal certainty without extending the scope, creating new regulatory categories or unnecessary overlaps.

Distinguishing decentralized infrastructure from financial services

Public, permissionless blockchains enable users to interact directly with decentralized infrastructure and activities performed through it, including activities such as staking, lending, or trading, without necessarily relying on traditional intermediaries. The consultation explores whether and how such activities should be regulated, raising important questions about where to draw the line between providing or participating in decentralized infrastructure and offering regulated services.

A central part of our response addresses DeFi, staking, and direct participation in public, permissionless infrastructure. We recommend against establishing separate regulatory regimes merely because activities involve decentralized technology. Instead, regulation should focus on identifiable persons performing regulated functions and exercising meaningful control over assets or transactions.

This distinction is particularly important for staking. On Cardano, ada holders can delegate their stake to participate in the network’s consensus mechanism and contribute to its security, without transferring custody or locking their assets. Such broad, decentralized participation is fundamental to the security, resilience, and decentralization of public proof-of-stake networks. Accordingly, direct, protocol-level participation should be distinguished from intermediated staking services involving custody or discretionary management. Similarly, the provision of general-purpose blockchain infrastructure, autonomous software, or technical access to a network should not automatically constitute a regulated service.

The response expresses our clear position against expanding MiCAR’s regulatory perimeter or introducing new, standalone regulatory regimes for DeFi, staking, and other protocol-level participation. Instead, the focus should remain on applying existing regulatory frameworks where appropriate, based on the actual functions performed and risks involved, while also avoiding unnecessary restrictions on decentralized infrastructure and direct network participation.

Addressing regulatory overlaps and improving practical implementation

Beyond questions about the scope of regulation, the consultation also examines practical challenges arising from the implementation of MiCAR, including overlaps with other EU legislation and regulatory requirements that may not adequately reflect the diversity of crypto-assets and technological designs.

Our response identifies several opportunities to improve the existing framework without fundamentally expanding its scope. These include clarifying the treatment of global and multi-issuer stablecoins, reducing overlaps between MiCAR and payment-services legislation, and refining environmental sustainability disclosures to better account for differences between blockchain architectures.

We advocate for preserving MiCAR’s exclusion for genuinely unique and non-fungible tokens (NFTs), and we oppose attempts to broaden the regulatory perimeter through an overly expansive interpretation of fungibility. In particular, membership in a larger collection or the sharing of certain characteristics should not, in itself, be sufficient to classify an NFT as fungible. Instead, classification must be based on the asset’s substantive characteristics and actual interchangeability. Equally important, subsequent uses of an NFT by independent third parties, such as fractionalization or integration into financial applications, should not automatically alter the regulatory classification of the underlying asset. We therefore oppose introducing a dedicated regulatory regime for NFT-related services, which should instead be assessed under existing legislative frameworks, where applicable, based on the nature of the activities performed and the risks involved.

Likewise, prediction markets, perpetual futures, and crypto-asset lending should be assessed under existing regulatory frameworks according to their economic and legal characteristics, rather than automatically being brought within MiCAR’s scope. Introducing new, dedicated regulatory regimes for these activities risks creating unnecessary complexity, regulatory overlaps, and potential conflicts with existing EU financial-services and other applicable legislation, without necessarily addressing any additional regulatory risks.

Strengthening harmonization and legal certainty

One of MiCAR’s central objectives is to establish a harmonized regulatory framework across the EU, allowing crypto-asset businesses to operate within the single market under consistent rules. However, differences in national interpretation, supervisory practices, and the treatment of certain legal questions can undermine this objective, creating uncertainty and additional compliance burdens for market participants.

Our response emphasizes the importance of greater consistency in regulatory interpretation across EU Member States. A harmonized framework can only deliver its intended benefits if comparable activities are subject to consistent regulatory treatment, rather than divergent national approaches.

We also support targeted improvements to cross-border legal certainty for tokenized assets, particularly through harmonized conflict-of-laws rules clarifying which national law governs ownership, transfers, and third-party rights. Such measures could address practical uncertainties without requiring a comprehensive harmonization of Member States’ substantive property laws.

Finally, we advocate for a proportionate approach to third-country market access, preserving genuine reverse solicitation and considering appropriate mechanisms for recognizing comparable third-country regulatory frameworks. Given the inherently global, as well as borderless nature of crypto-assets and their technology, such an approach would help reduce unnecessary market fragmentation while maintaining appropriate regulatory safeguards.

Looking ahead

MiCAR marks a well-intentioned step toward establishing a harmonized regulatory framework for Europe's crypto-asset market. However, regulation and harmonization alone do not guarantee a competitive or innovation-friendly environment, and more rules do not necessarily translate into better regulation. Complex requirements, high compliance costs, and persistent legal uncertainties can create significant barriers to entry, particularly for smaller businesses and emerging projects, while at the same time favoring established players who already have the resources to navigate increasingly demanding regulatory frameworks. Against the backdrop of intensifying global competition, Europe must be mindful that an overly burdensome regulatory environment risks discouraging innovation and investment rather than fostering it.

The ongoing review therefore presents an opportunity to critically assess MiCAR's practical impact and address its shortcomings. The priority should not be to expand the regulatory framework through a broader scope, additional requirements, or new regulatory regimes, but instead to improve what is already in place, address unnecessary complexity and regulatory overlaps, and rely on existing legislation where appropriate.

For the Cardano Foundation, the focus is therefore greater regulatory clarity, consistency, and proportionality, rather than expanding regulation simply because an activity involves crypto-assets or blockchain technology. This means reducing unnecessary complexity, resolving regulatory overlaps, and ensuring that requirements reflect the functions performed and risks involved. As emphasized throughout our consultation response, a technology-neutral and function-based approach is essential not only to ensuring effective regulatory safeguards, but also to fostering an environment that attracts investment, enables innovation, and strengthens Europe’s economic competitiveness and technological leadership on the global stage.

The Cardano Foundation will continue engaging with legislators, policymakers, and regulators, bringing practical insights and experience from the Cardano and the broader blockchain ecosystem. Such contributions are vital to inform the development of proportionate as well asand effective regulatory frameworks for digital assets and public, permissionless blockchain infrastructure.