Response to the European Commission's consultation on the review of MiCA

On 30 September 2026, the European Securities and Markets Authority ("ESMA") published its response to the European Commission's (the "Commission") consultation on the review of Regulation (EU) 2023/1114 on markets in crypto-assets ("MiCA"). 

Drawing on its initial implementation experience of MiCA, ESMA proposes a series of targeted amendments primarily aimed at clarifying the regulatory perimeter, preventing supervisory divergences across Member States, streamlining certain obligations, and adapting MiCA to business models that currently lack a specific regulatory regime, including certain services related to decentralised finance ("DeFi"), staking, and the lending and borrowing of crypto-assets.

ESMA also considers that the review of MiCA should be coordinated with the forthcoming Market Integration and Supervisory Package ("MISP"), particularly as regards the possible allocation of supervisory competences between ESMA and national competent authorities ("NCAs").

Clarification of MiCA’s regulatory perimeter

Classification of crypto-assets

ESMA's implementation experience suggests that classification remains one of the most important issues under MiCA, as questions frequently arise at the boundary between:

• crypto-assets within the scope of MiCA and financial instruments subject to Directive 2014/65/EU ("MiFID II");
• asset-referenced tokens ("ARTs") and e-money tokens ("EMTs"); and
• crypto-assets within the scope of MiCA and assets excluded therefrom altogether, such as certain NFTs, non-transferable tokens, or technical tokens such as wrappers.

These questions are particularly acute for crypto-assets with hybrid, embedded, or economically significant features that may not be fully reflected in their legal or technical classification – including hybrid tokens, fractionalised NFTs, certain wrapped or tokenised arrangements, and governance tokens.

ESMA proposes that the Commission provide legal certainty regarding the classification of crypto-assets directly in MiCA at Level 1 and introduce a mechanism enabling ESMA, in consultation with the EBA or jointly therewith, to issue binding opinions on the classification of tokens, including on ESMA's own initiative where recurring patterns are observed across the EU.

ESMA is further of the view that greater legal clarity is needed regarding the treatment of derivatives settled in ARTs, EMTs or other crypto-assets, and that settlement in such instruments should not prevent a derivative from qualifying as a financial instrument under MiFID II.

Unauthorised stablecoins

ESMA has observed that the current framework gives rise to uncertainty regarding the extent to which authorised CASPs may continue to facilitate the availability, use or trading of unauthorised stablecoins. Such uncertainty risks undermining supervisory convergence across the EU by fostering divergent interpretations and supervisory practices, leading to inconsistent levels of investor protection and creating an unlevel playing field.

To achieve legal clarity, ESMA encourages the Commission to amend the Regulation so as to provide explicitly that a CASP cannot provide any licensable service under MiCA in relation to ARTs or EMTs that are not compliant with the applicable requirements under MiCA. This amendment should remove interpretative ambiguity and create a binary supervisory test, which would ensure enforceability.

DeFi and the concept of decentralisation

Recital 22 of MiCA excludes from its scope services provided in a “fully decentralised manner without any intermediary”.

ESMA understands that the absence of a more precise definition is generating divergent interpretations and the risk of decentralisation washing, whereby arrangements are presented as decentralised in an attempt to fall outside the scope of MiCA, despite the existence of identifiable operators or intermediaries.

ESMA's preferred approach is to introduce a clear definition of DeFi directly into the operative provisions of MiCA and to narrowly circumscribe the exemption applicable to fully decentralised services. 

CASPs providing access to DeFi

ESMA proposes introducing a new regulated crypto-asset service covering access to DeFi protocols or services where a CASP acts on behalf of its clients as a gateway to such services.

The CASP would be subject to obligations relating to, among other matters, disclosure of protocol-related risks, protocol selection and routing criteria, conflicts of interest, due diligence on the protocols made available to clients, and operational and cybersecurity safeguards.

Marketing and reverse solicitation

ESMA considers that MiCA's current rules are insufficient to address certain marketing practices, particularly where marketing communications contain recommendations or predictions that do not necessarily qualify as false or misleading

ESMA therefore proposes considering restrictions on, or prohibitions of, certain marketing techniques, following an approach similar to that adopted under MiFID II, as well as introducing specific obligations for influencers and other third parties promoting crypto-assets or crypto-asset services on behalf of issuers or CASPs.

ESMA also proposes bolstering supervisory powers in relation to third-country entities that actively solicit clients in the European Union without authorisation, with a view to ensuring a strict interpretation of the reverse solicitation exemption under Article 61 of MiCA. 

Streamlining the current framework

Crypto-asset white papers

For crypto-assets falling within Title II of MiCA, ESMA proposes centralising the notification of crypto-asset white papers at ESMA level, removing the current involvement of national competent authorities as intermediaries in the notification process.

ESMA also considers it necessary to clarify when a white paper can be regarded as “duly notified”, given that MiCA does not provide for a prior approval procedure and the current five-working-day period for transmitting information to ESMA's register makes it difficult for national competent authorities to conduct a substantive review.

Transfer services

Under the current interpretation of MiCA, the transfer of crypto-assets on behalf of clients constitutes a separate crypto-asset service requiring authorisation, even where the transfer is provided as part of another crypto-asset service.

ESMA proposes simplifying this regime for investment firms authorised under MiFID II that provide crypto-asset services pursuant to the notification procedure under Article 60 of MiCA. Where the transfer service is equivalent to an investment service for which the firm is already authorised — in circumstances where the two services are so intrinsically linked that requiring an additional authorisation would be disproportionate — the firm should not be required to obtain a separate authorisation as a CASP under Article 63 of MiCA.

Prudential requirements

ESMA proposes aligning the calculation of CASPs' prudential requirements more closely with the framework established under Regulation (EU) 2019/2033 (the "IFR") and Directive (EU) 2019/2034 (the "IFD").

Specifically, ESMA proposes removing the exhaustive list of variable costs that may be deducted when calculating fixed overheads, thereby allowing for a methodology more closely aligned with that provided for under the IFR/IFD framework.

ESMA also notes that the current regime does not adequately reflect differences in risk profiles between CASPs providing different types or combinations of services, and that Annex IV to MiCA contains certain ambiguities regarding the prudential requirements applicable to Class 2 and Class 3 crypto-asset services.

Strengthening supervisory powers

ESMA proposes granting national competent authorities express statutory powers to order the removal or disabling of fraudulent websites or websites used by unauthorised service providers, particularly in light of the cross-border nature of crypto-asset-related scams.

ESMA also proposes empowering it to directly require a CASP to immediately freeze specific crypto-assets where there are reasonable grounds to suspect that they are linked to market abuse, financial crime, money laundering or terrorist financing. Such freezing measures would remain in place for as long as necessary to enable the competent authorities to investigate and take appropriate action.

Furthermore, ESMA proposes introducing the power to adopt permanent product intervention measures at EU level, in addition to the temporary measures currently provided for, thereby avoiding the need to subsequently replicate the same intervention via national measures in each Member State.

Cost transparency

ESMA notes that certain platforms advertise transactions with “zero fees” or reduced spreads when, in practice, the spreads applied allow them to recover, or even exceed, the amount of the fees ostensibly waived.

ESMA therefore proposes introducing specific disclosure obligations for CASPs providing execution of orders, reception and transmission of orders, and exchange of crypto-assets services, requiring them to provide comprehensive information on the various cost components of transactions.

Tokenised capital markets

ESMA considers it necessary to establish clearer rules for the tokenisation of existing securities and legally robust mechanisms for on-chain settlement.

In ESMA's view, the development of tokenised capital markets requires reducing the existing legal uncertainty surrounding matters such as issuance, legal ownership, custody, settlement finality and cross-border recognition, while ensuring interoperability between distributed ledger technology (“DLT”) infrastructures and traditional market infrastructures.

Staking, lending and borrowing

Staking

Finally, ESMA considers that staking is an inherent function of networks operating under Proof of Stake consensus mechanisms and should not automatically be classified as lending or portfolio management.

Nevertheless, ESMA proposes that staking services provided by CASPs should be subject to specific conduct of business, disclosure and safeguarding requirements, distinguishing between:

• Staking carried out directly by the asset holder without an intermediary;
• Technical staking services;
• Pooled staking or staking provided through custodial arrangements; and
• Liquid staking or yield-generating products, which may raise additional classification issues under MiCA, MiFID II or other financial services legislation.

Information to be disclosed to clients should include staking rewards, lock-up and unbonding periods, slashing risks, validator selection, fees, operational dependencies and the treatment of assets in the event of insolvency.

The extent of the applicable obligations should depend on the degree of intermediation, the level of control exercised over clients' assets, the pooling of assets and the degree of discretion exercised by the CASP.

Lending

ESMA identifies particular risks where CASPs receive crypto-assets from their clients and subsequently lend them to third parties, especially as MiCA's custody and segregation requirements may cease to apply once the assets have been lent.

ESMA proposes, among other measures, requiring clients' express written consent and introducing specific disclosure obligations covering matters such as the ultimate borrowers, collateral arrangements, loan terms and remuneration received.

ESMA does not propose establishing crypto-asset lending as a new crypto-asset service requiring separate authorisation, but rather introducing specific requirements for CASPs offering or facilitating such activities.

Borrowing

With regard to crypto-asset borrowing services, ESMA proposes specific conduct of business, disclosure and risk management requirements, particularly where such services are offered to retail clients or enable them to increase their exposure through leverage.

The regulatory framework should address, among other arrangements, collateralised borrowing, financing linked to margin trading or leveraged transactions, borrowing through DeFi protocols accessed via a CASP, and arrangements involving collateral reuse or recursive leverage.

Disclosures to clients should cover, among other matters, collateral requirements, liquidation mechanisms, potential rehypothecation or reuse of collateral, relevant counterparties, protocol-related risks and the treatment of assets in the event of insolvency..

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