EU Moves to Revise MiCA Framework as Grandfathering Period Expires July 1

The European Union's transitional grandfathering period under its Markets in Crypto-Assets (MiCA) regulation officially ended on July 1, compelling crypto-asset service providers (CASPs) without full licensing to halt operations across the bloc. Simultaneously, the European Commission has launched a review process to assess which parts of MiCA require revision in light of a rapidly evolving market.

The Commission initiated a formal consultation in May 2026 to evaluate whether MiCA remains fit for purpose, given significant shifts in the cryptocurrency industry since the regulation was drafted between 2020 and 2023. The review comes as newer regulatory frameworks have emerged in other major jurisdictions, including the United States and Hong Kong.

Patrick Hansen, Circle's director of EU strategy and policy, told CoinDesk the consultation should not be interpreted as a sign that MiCA failed. 'Being the first comprehensive crypto regulatory framework in the world, it was clear from the early days that it would be frequently reviewed with the pace of the crypto-asset and stablecoin markets,' Hansen said. He described MiCA as a 'version one' — a starting point to be refined rather than replaced.

Stablecoins have emerged as the primary area of concern in the review. When MiCA was originally drafted, legislators focused predominantly on exchanges and other CASPs, as stablecoins had not yet gained the widespread adoption seen today. Eva Legler, counsel for financial institutions regulatory at law firm Skadden, confirmed this to CoinDesk: 'At that point, stablecoins hadn't grown to be as popular as they are these days.'

Comparisons with the U.S. GENIUS Act for stablecoin regulation have put pressure on European policymakers to reconsider MiCA's approach. One specific issue flagged by Hansen involves reserve rules requiring minimum bank deposits — a provision that critics argue creates unnecessary friction. Despite these shortcomings, Hansen noted that approximately 20 euro-denominated stablecoins have received authorization under MiCA, with adoption supported by formal regulatory recognition.

Sebastian Barling, financial institutions regulatory partner at Skadden, described the EU's overall approach as building a 'fortress.' He characterized the Commission's consultation as 'a serious review intended to make sure the European regime aligns internationally and remains competitive.' Barling and Legler recently examined the Commission's shift toward evaluating a third-country equivalence regime and cross-border multi-issuance structures, noting that MiCA currently lacks a mechanism to defer to foreign regulatory frameworks.

An equivalence regime could mark a significant turning point. Such a framework would allow stablecoins regulated in one jurisdiction to circulate in another through mutual recognition agreements, potentially enabling globally issued stablecoins to be listed on EU exchanges. Hansen argued this approach would leverage the inherently borderless nature of digital assets: 'We could benefit from the global, internet-native nature of these assets instead of fragmenting their circulation through locally fragmented rulebooks.'

The EU's position as a first mover in comprehensive crypto regulation has also created inherent disadvantages. When MiCA was being drafted, there were no comparable frameworks in the U.S. or Hong Kong to serve as benchmarks. Policymakers now have the opportunity to incorporate lessons from those jurisdictions as the next phase of MiCA development takes shape.

The European Commission's consultation marks a pivotal moment for the bloc's regulatory posture on digital assets, with tokenization and stablecoin interoperability expected to be central themes in the updated framework. No formal timeline for amendments has been announced as of the July 1 deadline.