Cardano Foundation to EU: no separate MiCA rules for DeFi, staking

The Cardano Foundation has urged the European Union not to write new, standalone rules for decentralised finance and staking as it reviews MiCA, arguing that existing financial law should apply based on what an activity does and the risks it creates. The Swiss-based foundation outlined its 19-page submission to the European Commission, filed on 30 September, in a blog post on Wednesday, Cointelegraph reported.

What the foundation asks for

• A clear line between directly taking part in a decentralised network and financial services run by intermediaries, especially those that hold or control users' assets.
• Recognition that Cardano holders can delegate ADA to help secure the network without handing over custody or locking their tokens — which, it argues, is different from a staking service run by a company.
• Cleaner boundaries between MiCA and existing EU financial law, to avoid overlapping requirements and diverging national interpretations.

Our take

The argument is self-interested — Cardano's design makes it an easy case for "no custody, no intermediary" — but it addresses a real gap. The European Securities and Markets Authority (ESMA) recommended in September extra safeguards for staking, lending and borrowing, plus a new licensed category for firms that give access to DeFi protocols. If those ideas become law without a clear custody test, a person delegating from their own wallet could end up treated like a customer of a regulated platform.

Function-based rules sound tidy, but someone still has to decide where "access" ends and "service" begins. France is pushing the opposite way, toward more liability for DeFi front ends, as we covered in France's MiCA review proposals. The UK, meanwhile, is drawing its own perimeter, with the FCA consulting on DeFi guidance this week.

The foundation is also lobbying in Washington: it co-signed a letter with five other blockchain groups asking the SEC to put its "digital commodity" category into binding rules. For background on the activities at stake, see what DeFi is and proof of work vs proof of stake.