Cardano Foundation Pushes Back on New MiCA Rules for DeFi and Staking

The Cardano Foundation has urged the European Commission not to broaden the Markets in Crypto-Assets Regulation (MiCA) by creating new standalone rules for decentralized finance, staking, and other protocol-level activities. In a recent response, the foundation argued that regulation should target the functions performed and the risks created, not the underlying technology.

Regarding staking, the response noted that Cardano (ADA) holders can delegate their stake to help secure the network without transferring custody of their tokens or locking them up. The foundation stressed that this direct, non-custodial participation should be treated differently from intermediated staking services, where a third party holds or manages client assets. It recommended against applying the same regulatory requirements to both.

The foundation also called for maintaining the existing boundary between MiCA and traditional financial rules such as MiFID II. It said an asset’s classification as a financial instrument should depend on its substantive characteristics, not its technical form. While hybrid tokens and inconsistent national interpretations need more clarity, the group opposed expanding the regulatory perimeter or adding new categories that could create overlaps and complexity.

Beyond scope questions, the response identified practical improvements to the current framework, including clearer treatment of multi-issuer stablecoins, reduced overlaps with payment rules, refined sustainability disclosures that account for different blockchain designs, and stronger protection for genuinely unique NFTs. It also pushed for more consistent application across EU member states and better legal certainty for cross-border tokenized assets.

Conclusively, the Cardano Foundation warned that more regulation does not automatically mean better regulation. Complex new rules and high compliance costs could raise barriers for smaller projects and discourage innovation in Europe at a time of growing global competition. It said the priority should be refining what already exists rather than extending MiCA’s reach simply because an activity involves blockchain technology.