European authorities aim to implement concrete regulations for decentralized finance (DeFi) by 2026. The existing Markets in Crypto-Assets Regulation (MiCA) lacks clear guidance on decentralization, leaving many aspects of the DeFi sector undefined.
The MiCA regulation will take effect on December 30, 2024, focusing on investor protection and stablecoin reserve management. However, the implications for DeFi protocols are still vague, with policymakers expected to begin defining decentralization legally around mid-2026.
Though there were discussions about a MiCA II framework, experts indicate it is unlikely to advance. Instead, targeted legislative updates may arise, particularly surrounding stablecoin regulations, while significant gaps in guidance persist.
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