The EU plans to establish a DeFi regulatory framework by 2026, and the MiCA II proposal has been rejected.

According to EU crypto policy experts, Europe plans to launch work on a regulatory framework for decentralized finance (DeFi) in 2026. Although the Markets in Crypto Assets Regulation (MiCA) came into effect on December 30, 2024, the regulation does not provide a clear definition of “decentralization”, leaving DeFi protocols in a regulatory vacuum. Vyara Savova, head of policy at the European Crypto Initiative, said that the current MiCA regulations theoretically exclude “fully decentralized” protocols from the scope of regulation, but the specific criteria for determining this have not yet been clarified. The European Union plans to start legally defining the concept of decentralization in mid-2026 and is currently making regulatory changes to specific areas such as stablecoins. It is worth noting that Marina Markezic, executive director of the European Crypto Initiative, confirmed that the MiCA II framework, previously advocated by ECB President Lagarde, has been determined not to move forward. It was also disclosed that the EU’s new anti-money laundering rules for privacy coins and anonymous accounts will come into effect in 2027 as planned.