European Commission Launches MiCA Review and Public Consultation

The European Commission has launched a formal review of its landmark Markets in Crypto-Assets Regulation (MiCA), opening a public consultation to assess whether the framework needs updating just two years after its key provisions took effect. The consultation, which will accept feedback until August 31, seeks input from the crypto industry, financial institutions, academics, and the general public on the regulation's practical functioning.

Officials stated that the review is prompted by the continued evolution of crypto markets and the global regulatory environment since MiCA's implementation. The regulation, which established a harmonized framework for crypto assets and service providers across the European Union, first applied rules for stablecoins in June 2024, with broader provisions for crypto-asset service providers (CASPs) taking effect in December 2024.

The consultation focuses on several specific areas where the framework may require adjustment. A central topic is the regulation of stablecoins, including a reassessment of MiCA's current prohibition on issuers paying interest to holders. The review also examines reserve requirements, liquidity management, and redemption...