European legislators have not yet defined “decentralization”, even if regulators are starting to prepare for decentralized finance (DEFI) to become a key objective of cryptographic policy in 2026.
The first complete regulatory framework in the world for cryptographic industry, the Crypto-Asets (Mica) regulation markets entered into force on December 30, 2024. Among its objectives, there is stimulation of investor protection, to prevent fraud and to deal with the management of Stablecoin reserves.
However, while Mica is entering its final implementation phase, political decision -makers turn their attention to the regulation of DEFI, where many questions remain unresolved, according to Vyara Savova, head of the higher policy of the European Crypto initiative (Euci).
Speaking during the chain reaction spaces in Cointelegraph on June 4, Savova said that the protocols DEFI remain in the regulatory limbo.
The implementation of the frame leaves the ambiguity around the protocols DEFI, because “Defi is theoretically outside the scope of the mica,” said Savova, adding:
“No one really knows what EU political decision -makers hear by Defi.”
Savova said that from mid-2026, the Bloc authorities will begin to interpret how to legally define decentralization.
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The initial framework of Mica has received important criticisms for its shortcomings concerning decentralized protocols, as it required that the DEFI platforms have repercussions to the same license requirements and know the requirements of your customers (KYC) as traditional financial services companies.
However, a provision of the bill, Recital 22, said that the providers of completely decentralized cryptocurrency services “should not be the scope of this regulation”.
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While the final implementation of Mica was put online at the end of 2024, legislators still produced revisions every 12 to 18 months linked to potential gaps in the regulations.
However, despite numerous previous calls from Christine Lagarde, president of the European Central Bank, the MICA II executive does not go ahead, according to Marina Markezic, executive director and co -founder of Euci:
“You’ve probably heard of a potential Mica II. It doesn’t happen.”
She added that ongoing discussions on the stablecoins can lead to targeted legislative updates rather than a full suite of Mica.
The EU has not yet deployed new rules for combating money laundering that restrict the use of private documents and anonymous crypto accounts. These provisions should come into force in 2027.
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