The Cardano Foundation has urged the European Union not to broaden the Markets in Crypto-Assets regulation, or MiCA, to directly cover decentralized finance and staking. In a 19-page submission sent to the European Commission on September 30, the group argued that crypto rules should be built around the real nature of an activity and the risks it creates, rather than the technology used to carry it out.
Its position centers on a distinction between users taking part in a blockchain network themselves and services run by intermediaries on behalf of customers. According to the foundation, those models should not automatically be grouped together under the same regulatory treatment.
Focus on control of assets
The foundation’s main argument is that regulation should turn on substance, function and risk. In its view, the key question is who controls the assets involved, not whether an activity is described with a broad label such as staking or DeFi.
In the case of Cardano, the submission says ADA holders can contribute to securing the network without surrendering custody of their tokens or locking them up. Because of that, the foundation argues this form of participation should not be treated in the same category as staking services offered by intermediaries.
Argument against broad technology-based rules
The filing warns against extending MiCA simply by reference to the underlying technology. Instead, it calls for an approach that separates direct participation in blockchain systems from financial services that insert a third party between the user and the network.
That distinction matters, the foundation argues, because intermediary-operated products can create a different risk profile from arrangements where users retain control over their own assets. Its submission therefore asks EU policymakers to avoid a one-size-fits-all expansion of the current regime.
Debate comes as EU considers wider oversight
The request arrives while European authorities are weighing whether oversight of crypto-assets should go further than MiCA’s current scope. The discussion includes questions around staking as well as other crypto activities such as lending and borrowing.
At the same time, the European Securities and Markets Authority, or ESMA, has recommended additional safeguards for staking, lending and borrowing. It has also backed a separate regulatory category for services that provide access to DeFi, showing that the policy debate in Europe is moving beyond the first phase of MiCA implementation.
Call for clearer legal boundaries
Beyond opposing a broader MiCA mandate for DeFi and staking, the Cardano Foundation also asked for clearer lines between MiCA and existing financial rules. It said those boundaries need to be more precise to reduce uncertainty for market participants.
The concern is that unclear overlaps could lead to inconsistent interpretation across EU member states. For the foundation, the next step is not simply deciding whether to widen crypto regulation, but defining where MiCA ends and other financial laws begin.
Source: en.bloomingbit.io