The Cardano Foundation published details of its formal response to the European Commission’s public consultation on reviewing the Markets in Crypto-Assets Regulation (MiCA, also referred to as MiCAR).
In a 19-page submission dated 30 September 2026, the Swiss-based non-profit organization urged EU policymakers against creating new, standalone regulatory regimes for decentralized finance (DeFi) and staking activities.
The Foundation’s central argument is that regulation should track the actual substance of an activity, the specific functions being performed, and the risks generated, rather than the underlying technology employed.
It explicitly recommends against establishing separate rules simply because activities rely on decentralized technology.
Instead, oversight should concentrate on identifiable persons who perform regulated functions and exercise meaningful control over assets or transactions.
This distinction is especially relevant to staking. On the Cardano network, holders of the native ADA token can delegate their stake to help secure the proof-of-stake consensus mechanism and contribute to network resilience.
Crucially, this process allows users to participate without transferring custody of their assets or locking their tokens.
The Foundation contends that such direct, protocol-level involvement differs fundamentally from intermediated staking services in which third parties take custody of users’ assets or exercise discretionary management.
Broad, decentralized participation of this kind is essential to the security and decentralization of public proof-of-stake blockchains.
The response further argues that supplying general-purpose blockchain infrastructure, autonomous software, or mere technical access to a network should not automatically qualify as a regulated financial service.
Expanding MiCA’s perimeter or introducing dedicated regimes for DeFi, staking, and similar protocol-level activities would be counterproductive.
Where risks exist, existing financial services frameworks should be applied based on the concrete functions and risks involved, while avoiding unnecessary restrictions on decentralized infrastructure and direct network participation.
Beyond DeFi and staking, the Foundation calls for clearer boundaries between MiCA and other EU legislation, particularly the Markets in Financial Instruments Directive (MiFID II).
Hybrid tokens and evolving asset characteristics currently create classification challenges.
Overlapping requirements combined with inconsistent interpretations across member states risk generating legal uncertainty for crypto businesses operating in the single market.
The organization supports maintaining the existing distinction between MiCA and traditional financial-services rules, while seeking greater legal certainty without broadening the scope or creating new categories.
These positions arrive as EU authorities review MiCA’s effectiveness following its full application.
The European Securities and Markets Authority (ESMA) has recommended additional proportionate safeguards and disclosures for staking, lending, and borrowing services offered by authorized crypto-asset service providers.
ESMA has also proposed a new regulated service category for firms that act as gateways providing clients with access to DeFi protocols.
The Cardano Foundation’s submission effectively pushes back against treating these areas through expanded MiCA rules, preferring targeted improvements to the current framework.
More broadly, the Foundation emphasizes that additional regulation does not automatically produce better outcomes.
Complex compliance obligations, high costs, and persistent uncertainties can erect barriers for smaller participants while favoring larger, better-resourced entities.
Against intensifying global competition for digital asset innovation, Europe should prioritize proportionality, technological neutrality, and consistency.
Refining the existing rules to reduce overlaps, clarify hybrid assets and stablecoin treatment, preserve the NFT exclusion, and strengthen cross-border legal certainty would better support competitiveness without unnecessary expansion.
By advocating a function- and risk-based approach, the Cardano Foundation seeks to protect direct user participation in public, permissionless networks while ensuring appropriate safeguards apply where intermediaries control assets or deliver financial services. Its engagement continues as the Commission assesses consultation responses and considers potential legislative adjustments.
