Cardano Foundation Asks EU to Skip Standalone DeFi and Staking Rules

The Cardano Foundation has told the European Union that decentralized finance and staking should not get their own separate rulebook. In a post summarizing its 19-page submission to the European Commission, dated Sept. 30, the foundation argued that existing financial laws can already cover these activities if they are applied according to what an activity does and the risks it creates. In its words, rules should follow substance and function rather than the technology behind a service.

Direct Participation vs. Intermediary Services

The foundation wants regulators to separate people who take part directly in a decentralized network from firms that offer financial services on top of it, especially those that hold or control customers’ assets. It pointed to Cardano, where users can delegate ADA to help secure the network without handing over custody or locking their tokens. That kind of participation, it said, should not be treated the same as staking services run by intermediaries.

Regulators Are Moving the Other Way

The position comes as EU authorities weigh broader oversight. In September, the European Securities and Markets Authority recommended extra safeguards for staking, lending and borrowing, along with a new regulated category for firms that give customers access to DeFi protocols. Across the Atlantic, the foundation also joined five other blockchain organizations in an Oct. 20 letter urging the US Securities and Exchange Commission to formally recognize digital commodities as non-securities.