Foreign media reports indicate that as the transition period for the EU's Crypto Asset Market Regulation Act (MiCA) nears its end, European crypto regulation will not be finalized. Lukáš Kovarik, a legal and regulatory expert interviewed, believes that even after MiCA enters full implementation in July, the EU will continue to adjust rules regarding stablecoins, DeFi, asset tokenization, and regulatory authority.

Full implementation will begin in July.

Currently, the EU is still in the MiCA transition and "grandfather clause" phase, which ends on July 1st. After the transition period, only entities that have obtained a MiCA license will be able to conduct business in the EU market. This means that MiCA will transition from a transitional arrangement to a more comprehensive and unified regulatory framework.

Regulatory authority remains to be clarified

Kovarik stated that the regulatory model for crypto asset service providers is still under discussion at the European legislative level. A key issue is whether regulatory power should continue to be held by the competent authorities of each member state, or whether it should be further centralized in the European Securities and Markets Authority (ESMA).

He also mentioned that the EU is considering expanding its distributed ledger technology (DLT) pilot program. This program is primarily designed to support the issuance of securities based on DLT infrastructure, and if expanded, it could provide testing grounds for more financial assets to be put on the blockchain.

• The European Commission has launched a public consultation on the MiCA review.
• The discussion covered stablecoins, DeFi, and tokenization.
• The rules for encryption service providers are also being evaluated to determine if they need to be updated.

Stablecoins and tax systems are attracting attention.

Kovarik believes that the EU once gained attention for the clearer rules offered by MiCA, but with the US and parts of Asia also advancing digital asset policies in recent years, Europe is facing increasing competitive pressure.

In his view, the EU is currently lagging behind in the issuance and trading of stablecoins and lacks sufficiently clear rules for broader asset tokenization. If it hopes to remain attractive, existing rules still need further revision.

In addition to the regulatory framework, he also pointed out that the tax system for digital assets in Europe is relatively fragmented. Different member states have different tax treatments and accounting standards, which increases the complexity of cross-border business operations and product launches.

Regarding the practical role of MiCA, he believes that the licensing system helps improve transparency and market trust, and provides a more stable compliance foundation for institutional investors to enter the European crypto market.

Additional information:Kovarik also mentioned that the European Central Bank plans to advance the digital euro project, which may play a more important role in the design of Europe's digital asset regulation and payment system in the coming years.