The European Commission launched a formal review of MiCA on the same day its grandfathering period expired, admitting that a regulation drafted when exchanges were the main concern is now struggling to keep pace with stablecoin-dominated markets.
Stablecoins Were an Afterthought in MiCA v1
When MiCA was written between 2020 and 2023, lawmakers focused on crypto asset service providers (CASPs), not stablecoins. Eva Legler, counsel at Skadden, told CoinDesk that stablecoins "hadn't grown to be as popular as they are these days." Fast-forward to 2026: the U.S. passed the GENIUS Act specifically for stablecoins, and the EU now has around 20 authorized euro-denominated stablecoins, but its reserve rules requiring minimum bank deposits are already seen as too rigid.
Circle's director of EU strategy Patrick Hansen called MiCA "version one" — something that works in parts but needs adjustment. He pointed out that stablecoin rules are the standout area where MiCA underperforms compared to newer frameworks.
Fortress Europe vs. Global Liquidity
Skadden partner Sebastian Barling described the EU's current posture as building a "fortress" — MiCA lacks any mechanism to defer to foreign equivalents. The consultation is now exploring an equivalence regime that would allow stablecoins regulated in one jurisdiction to circulate in the EU. Without it, stablecoins lose the network effect that makes them valuable.
Barling is blunt on the consequences: "Requiring separate issuance and liquidity pools across jurisdictions risks undermining the efficiency that makes stablecoins valuable in the first place." The Commission is also weighing tighter redemption safeguards, a direct response to the cross-border stress scenarios no one worried about in 2021.
Tokenization Already Outpacing Stablecoins
Barling noted that 2025 was "probably the year of stablecoins," but this year his conversations have shifted to broader tokenization of real-world assets. The Commission's review must now balance opening the European market to global liquidity while keeping consumer protection intact.
Hansen framed the challenge cleanly: "We could benefit from the global, internet-native nature of these assets instead of fragmenting their circulation through locally fragmented rulebooks." The consultation runs through 2026, and the outcome will determine whether Europe leads or lags in the next phase of blockchain finance.
Source: Europe is rewriting its landmark crypto rulebook MiCA as hard July 1 deadline passes
Domain: coindesk.com
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