Cardano Foundation Opposes Expanding EU MiCA Rules to DeFi and Staking

The Cardano Foundation's Position

In its September 30 response to an EU policy consultation, the Cardano Foundation argued that European regulators should not extend new rules to decentralized finance, staking, and protocol-level blockchain activities. The foundation contends that policymakers should instead focus on improving the existing Markets in Crypto-Assets Regulation (MiCA) to address gaps and emerging risks without treating every blockchain interaction as a regulated financial service.

The foundation's core argument centers on distinguishing between activities and intermediaries. Rather than creating blanket regulations for decentralized technology itself, it advocates for targeting the specific actors and services that pose financial stability or consumer protection risks. This approach would leave protocol-level interactions—such as automated market makers or validator operations—outside the regulatory perimeter while continuing to regulate custodians, exchanges, and other intermediaries that interface with consumers.

Why the Distinction Matters

The Cardano Foundation's position reflects a broader debate within the crypto industry over regulatory scope. Applying MiCA-style requirements to protocol-level DeFi and staking could impose compliance burdens on decentralized networks themselves, which lack legal entities or corporate structures to absorb regulatory obligations. By contrast, activity-based regulation would preserve the ability for open-source protocols to operate while subjecting service providers—who do have clear legal forms—to defined rules.