Europe Reviews MiCA Crypto Rules Three Years After Launch, Eyes Stablecoin Overhaul

Three years after Europe’s Markets in Crypto Assets rules took effect, regulators have opened a consultation, running through around September, to update the framework. Officials say MiCA was built mainly for spot crypto trading and no longer fits the scale of stablecoin and tokenization activity in institutional finance.

Stablecoin Debate Takes Center Stage

The European Central Bank has warned that dollar pegged stablecoins could weaken its grip on monetary policy, favoring a digital euro instead. Still, some officials have softened their stance, according to OMFIF’s John Orchard, who said the ECB may now tolerate stablecoins on bank balance sheets but resists their use in wholesale settlement. Unlike the US GENIUS Act, which lets stablecoin reserves sit in government debt, MiCA requires reserves to flow back into banks. The EU is reportedly exploring a similar model allowing reserves to buy government money market instruments.

Multi-Issuance And Oversight Questions Remain

Regulators are also debating how to handle multi-issuance tokens like USDC and whether to centralize supervision under ESMA, a move that could unify enforcement but risks slowing industry growth, according to Luxembourg-based B2C2’s Denzel Walters.