Cardano Foundation Urges EU to Prioritize MiCAR Implementation Over Expansion

• The Cardano Foundation argues that the EU should focus on consistently implementing MiCAR rather than widening its scope, which could add unnecessary burdens for market participants.
• The organization recently submitted its recommendations, voicing opposition to certain proposed expansions under MiCAR 2.0.

The Cardano Foundation, a Swiss-based non-profit responsible for promoting the Cardano (ADA) blockchain, has expressed concerns over the European Union’s proposed expansion of the Markets in Crypto-Assets Regulation (MiCAR). In a recent statement, the foundation emphasized, “Increased regulation doesn’t always equate to improved regulation.”

Focus on Consistency

In late September, the foundation formally responded to the European Commission’s targeted consultation regarding the MiCAR review. The submission urged regulators to prioritize the effective execution of the current regulatory framework before considering further modifications.

The foundation maintains that MiCAR already provides sufficient protections for both consumers and markets. It stressed that successful implementation hinges on applying the regulation uniformly across jurisdictions and industries.

Stance Against Broadening MiCAR

While the Cardano Foundation supports the EU’s clear separation between MiCAR and traditional financial regulations like the Markets in Financial Instruments Directive (MiFID II), it cautioned against classifying assets solely based on their underlying technology. Instead, it advocates for evaluating assets based on their economic substance.

Although the foundation acknowledges challenges such as hybrid tokens and divergent interpretations within the crypto space, it opposes measures that would stretch MiCAR’s reach unnecessarily. It argues that introducing new categories may lead to duplication of efforts and increased compliance costs, ultimately reducing efficiency for businesses operating in the sector.

Ultimately, the foundation called for regulatory clarity grounded in practicality and proportionality. It warned against expanding oversight simply due to involvement with crypto-assets or distributed ledger technologies and proposed adopting a neutral, function-driven approach instead.

Engaging with Policymakers

Despite its reservations about expanding MiCAR, the Cardano Foundation remains open to continued discussions with policymakers. The group emphasized its commitment to working collaboratively to serve the interests of the Cardano community and the wider blockchain ecosystem.

It also expressed willingness to engage in ongoing dialogue aimed at simplifying regulations to enhance the global competitiveness of Europe’s digital asset market.

Future of MiCAR 2.0

The foundation’s input comes amid preparations by the European Commission for a potential “MiCAR 2.0” framework. This updated version seeks to extend regulatory coverage beyond harmonizing crypto rules across the EU, targeting areas such as decentralized finance (DeFi), staking, lending, and borrowing, along with select NFT-related activities.

Source link