ESMA Proposes Targeted MiCA Changes for DeFi Stablecoins and Staking

The European Securities and Markets Authority (ESMA) on 30 September 2026 published its response to the European Commission’s public consultation on the review of the Markets in Crypto-Assets Regulation (MiCA), proposing targeted amendments covering token classification, decentralised finance, stablecoins, staking, lending and borrowing, supervisory powers and the development of tokenised capital markets.

In its announcement, the EU’s financial markets regulator and supervisor said its recommendations aim to simplify the framework while improving investor protection and addressing business models such as decentralised finance (DeFi), staking, lending and borrowing. The full response, referenced ESMA75-113276571-1721, states that the review should focus on removing legal uncertainty and preventing regulatory arbitrage while ensuring simplification and burden reduction for market participants.

According to the document, 1 July 2026 marked the end of the MiCA transitional period, and the proposals draw on ESMA’s initial implementation experience with Regulation (EU) 2023/1114. ESMA calls for better alignment between MiCA and MiFID II and for consistency with the forthcoming Market Integration and Supervisory Package (MISP), particularly for supervisory arrangements where a crypto-asset service provider (CASP) belongs to a financial group under consolidated supervision.

Token Classification, Stablecoins and DeFi

ESMA states that classification remains one of the most important issues under MiCA, citing recurring boundary questions between crypto-assets in scope of MiCA and financial instruments under MiFID II, between ARTs and EMTs, and between in-scope assets and those outside MiCA altogether, such as certain NFTs, non-transferable tokens, hybrid tokens, fractionalised NFTs and governance tokens. Under Article 97(3) of MiCA, national competent authorities (NCAs) may request a non-binding opinion from ESMA, the EBA or EIOPA on the classification of a crypto-asset. ESMA has so far issued only one such opinion, and it proposes a mechanism under which ESMA, in consultation with or jointly with the EBA, would issue binding classification opinions, including on its own initiative where recurring patterns are observed across the EU.

On derivatives, ESMA states that settlement in ARTs or EMTs should not prevent a derivative from qualifying as a financial instrument under MiFID II, and it invites the Commission to clarify the treatment of derivatives settled in ARTs, EMTs or other types of crypto-assets.

ESMA also invites the Commission to amend the regulation to provide explicitly that a CASP cannot offer any licensable service under MiCA in relation to ARTs or EMTs that do not comply with MiCA’s requirements, an amendment it says would eliminate interpretative ambiguity and create a binary supervisory test to ensure enforceability.

On DeFi, ESMA reports divergent views across the EU on the meaning of full decentralisation under Recital 22 of MiCA, and it warns of “decentralisation washing”, which it describes as occurring where an identifiable operator relies on DeFi-type language to avoid MiCA obligations. ESMA invites the Commission to introduce a clear definition of DeFi in the legal text, states that the DeFi exemption should be as narrow as possible, and offers as an alternative that ESMA be empowered to issue technical guidelines.

The response proposes a new regulated crypto-asset service covering CASPs that provide clients with access to decentralised protocols or DeFi services. This gatekeeper service would apply where a CASP provides a technical interface enabling clients to interact with DeFi protocols, facilitates transaction routing or interaction with smart contracts, or otherwise acts as an intermediary between clients and decentralised financial services. Such firms would face obligations including disclosure of DeFi risks, transparency on protocol selection and routing practices, management of conflicts of interest, due diligence on protocols made available through the interface, and operational and cybersecurity safeguards. ESMA states the obligations should remain proportionate to the level of control the CASP exercises over the underlying protocol, and that open-source development, self-custody, automated smart contracts and permissionless infrastructure should not automatically amount to regulated intermediation.

Marketing, Supervision and Service Rules

ESMA proposes stricter rules for the marketing of crypto-assets, particularly when they are promoted by influencers and third parties. It states that MiCA’s marketing provisions are too high level for NCAs to enforce effectively and that MiCA does not apply to influencers and third parties promoting crypto-assets on behalf of issuers and CASPs. ESMA invites the Commission to consider banning or limiting certain marketing practices for certain types of crypto-assets, in line with the MiFID II approach, and says supervisors should receive specific powers to address third-country firms that actively solicit EU investors without MiCA authorisation, so that the reverse-solicitation exemption in Article 61 is interpreted consistently and as narrowly as possible.

On costs, ESMA states it has witnessed misleading information displayed to investors, citing CASPs that claim zero-commission trading and tight spreads while applying spreads high enough to recoup or exceed the income forgone from the zero-commission claim. ESMA proposes requiring CASPs that provide execution, RTO and exchange services to give full cost information to investors.

On simplification, ESMA recommends that the Commission clarify the criteria for determining when a Title II white paper has been duly notified and centralise the Title II notification process at ESMA, removing NCAs from their intermediary role. The document notes that the current five-working-day deadline for submissions to ESMA’s white paper register makes a review of each white paper for basic compliance impractical.

ESMA also addresses authorisation for transfer services. Following Commission Q&A 2071, which clarified that crypto-asset transfer services are a distinct, self-standing service subject to Article 59 authorisation even when provided as part of another service, ESMA proposes clarifying that investment firms authorised under MiFID II that notify under Article 60 should not need a separate licence under Article 63 for transfer services equivalent to the investment services they are already authorised to provide.

On prudential requirements, ESMA proposes aligning CASP capital requirements with the IFR/IFD framework, including deleting the limitative list of variable costs that can be deducted when calculating total fixed overheads. It notes concerns among NCAs that current requirements do not sufficiently capture differences in risk profiles arising from the scope of services provided or from legal and group structures.

The response proposes that NCAs be assigned explicit legal powers to order the removal of scam or unauthorised websites, noting that fraudulent domains may be registered, hosted and promoted outside the jurisdictions where victims are located. Alongside powers granted to NCAs at national level, ESMA proposes that it be assigned direct powers to require a CASP to immediately freeze crypto-assets where there are reasonable grounds to suspect links to market abuse, money laundering or terrorist financing, for as long as needed for investigation and enforcement, including under Directive (EU) 2015/849. ESMA also proposes the possibility of taking permanent product intervention measures, in addition to its existing temporary powers, whether or not the MISP proposal to transfer CASP supervision to ESMA is adopted.

On staking, ESMA invites the Commission to subject staking services provided by authorised CASPs to targeted conduct, disclosure and safeguarding requirements, without automatically treating staking as equivalent to lending or investment management. The response distinguishes self-directed staking with no intermediary, technical staking services, pooled or custodial staking, and liquid or yield-bearing staking products, and it lists enhanced disclosures covering rewards, lock-up and unbonding periods, slashing risk, validator selection, fees, operational dependencies and insolvency treatment.

On lending, ESMA states that crypto lending can cause cascading failures when CASPs borrow crypto-assets from clients and on-lend them to third parties, and it describes client lending programmes as “effectively black boxes for clients”. ESMA proposes rules including express written client consent and disclosure requirements rather than a newly authorised service. For borrowing, it proposes targeted conduct, disclosure and risk-management requirements, particularly where services are offered to retail clients or involve leverage.

Looking beyond the immediate review, ESMA states that the EU should adopt clearer rules for tokenising existing securities and provide reliable on-chain settlement options, warning that persistent uncertainty over issuance, legal title, custody, settlement finality and cross-border enforceability risks creating separate national or technological silos. Over time, the response states, an optional EU-level 28th regime could establish a consistent basis for issuing, transferring and settling tokenised securities across Member States without requiring immediate harmonisation of every relevant area of national law.