The European Commission has begun a consultation on revising the crypto regulatory framework MiCA, bringing stablecoins and DeFi rule updates to the fore.

Cointelegraph reported on Friday that the industry is focusing in the MiCA 2.0 talks on the competitiveness of euro-denominated stablecoins and clearer rules for DeFi.

The European Union began collecting opinions in May on regulation of the crypto and blockchain industry. The process is a step ahead of future revisions to MiCA and any additional legislation. MiCA took full effect on Dec. 30, 2024, and the first licences were issued in the first few months of 2025.

Katie Harries, Coinbase's head of Europe policy, assessed that MiCA set an early global standard for digital asset regulation and gave the European Union a first-mover advantage. She said some upgrades are needed to stay competitive in the next regulatory phase.

Stablecoins are considered one of the most sensitive areas in the revision talks. Katarina Veloso, head of regulation and compliance at Notabene, pointed to the consultation section as the longest and politically most sensitive. The regulatory focus could vary depending on whether stablecoins are treated as a medium of exchange, a retail payment method or an infrastructure for inter-institution payments.

Coinbase argued that MiCA 2.0 should be adjusted to boost the competitiveness of euro-denominated stablecoins. Harries said rules on reserve assets, rewards and multiple-issuer models should be recalibrated, and that increasing the share of high-quality government bond-like assets could reduce risk without undermining safety. She also said that because current rules ban e-money token issuers from offering interest, non-interest incentives such as cashback and loyalty programmes should be allowed.

DeFi rules are also being cited as a key revision target. Under current MiCA, crypto-asset service providers that operate in a fully decentralised manner without intermediaries are not covered. Veloso said decentralisation is not a concept that can be split simply into two categories, and that regulators should judge based on factors including protocol control and governance rights, admin keys, front-end control, revenue attribution, upgradeability and the influence of identifiable individuals.

The talks also cover what responsibility crypto-asset service providers should bear when linking customers to DeFi platforms. Miroslav Juric at Taylor Wessing said many businesses already link customers to DeFi platforms and that regulators may consider requiring due diligence on linked platforms or limiting links to certified platforms.

Prediction markets are also included in the consultation. The European Union currently has no single regulatory framework covering them, and some countries ban prediction markets. The Commission is also seeking views on whether prediction markets provide economic benefits to consumers and whether they fall under MiCA or the Markets in Financial Instruments Directive, Cointelegraph reported. The consultation ends on Aug. 31, but the overall process could take years, it said.