The European Union, once a leader in crypto regulation, now faces a threat of losing its influence on the global market due to the unexpectedly rapid evolution of legislation in the US and Asia.
Challenges with MiCA Regulation
The MiCA regulation, once regarded as groundbreaking, is already showing its limits. As Catriona Kellas, international legal head for digital projects at Franklin Templeton, noted, the slow legislative process could lead to Europe becoming a 'flyover zone'—a space through which innovations pass but rarely choose as a permanent home. She states, 'There is a real risk that this technology will slip away from the jurisdictions that were at the forefront just a few years ago.'
Competition from the US and Asia
Kellas also pointed out that the dynamics observed in the US and Asia create pressure on Europe. Countries like Singapore and South Korea have implemented more flexible and experimental regulations that attract innovative companies. European regulators express concerns about rapid licensing and heterogeneous rule application, while companies like Coinbase and Gemini seek licenses in Luxembourg and Malta.
Europe's Future in the Crypto Space
If Europe does not adapt its approaches, it risks losing its role as an arbiter in international crypto discussions. Nevertheless, new DeFi regulations are already being prepared, expected to come into effect in 2026, as current MiCA measures are no longer sufficient for the fast-evolving market.
Europe's future in crypto regulation will depend on its ability to react quickly and adapt to changes occurring on a global scale.
