MiCA Is Not Enough: Europe Is Preparing New DeFi Regulation By 2026

Europe loves rules. And it does not pretend otherwise. After MiCA, its crypto legal arsenal is strengthening. By 2026, a regulatory wave will this time target decentralized finance. This announcement puts crypto players on alert. Because behind the words “DeFi regulation” lies a troubling legislative gray area. A void where every line of code could become a legal risk.

The 2026 Legal Shock in the Crypto Universe

The European Union is about to shake up the crypto ecosystem with targeted regulation of decentralized finance. Until now, MiCA governed tokens, providers, and stablecoins. But it did not include DeFi, deliberately left in a gray area. This time, Brussels wants to fill the gap.

Starting in 2026, institutions will begin to legally define the concept of “decentralization”. To date, no text provides a clear definition. The Recital 22 of MiCA acknowledges that “fully decentralized” platforms fall outside its scope. However, this exception raises more questions than it answers.

The anti-money laundering manual. Source: EUCI

The European Commission thus plans a framework evaluation every 12 to 18 months. This pace forecasts a series of legislative adjustments. The goal? To ensure that DeFi platforms meet transparency and security requirements, comparable to centralized players. But at what cost?

The cost could be heavy for open source developers. If a DeFi protocol becomes classified as a financial service provider, it could be subject to obligations such as KYC, auditing, or even a minimum capital requirement. An idea that clashes with the cypherpunk ethic of the crypto ecosystem.

MiCA II: A Buried Idea or a Disguised Resurrection?

Christine Lagarde dreamed of it . MiCA II was supposed to strengthen the regulatory net around staking, lending, and programmable finance. Yet, in 2025, this ambition seems shelved.

“You may have heard about a MiCA II. It is not on the agenda“, said Marina Markezic, director of EUCI. The European executive prefers targeted legislative amendments. Result: no new foundational text, but a stacking of specific regulations, often debated less publicly.

This choice is political. After the FTX crash, Europe wanted to avoid appearing passive. The ECB cried scandal, arguing that a global MiCA could have prevented the fiasco.

With a global MiCA, the FTX crash would not have happened.

Stefan Berger, rapporteur of the text

But this stance hides a reality: regulating a decentralized system as if it were a bank does not work. By removing MiCA II, Brussels avoids direct conflict with crypto communities. But it prepares more incisive laws in the shadows, without calling them that.

The Real Danger: The Hidden Control of a Rebellious Infrastructure

What no one says loud and clear: DeFi regulation could become a political weapon. The 2023 MiCA regulation PDF mentions reporting and traceability obligations enforceable on all technical actors. Including developers of a simple smart contract.

Behind the scenes, worrying options are being discussed:

• Impose legal liability on code authors, even without an operational role;
• Ban anonymous liquidity pools under the pretext of anti-money laundering;
• Treat DAOs as unregistered companies, exposing their members to prosecution;
• Force KYC on all interfaces, even decentralized ones;
• Criminalize contribution to certain projects if deemed “non-compliant”.

This gradual shift of European law towards increased surveillance turns the promise of crypto empowerment into an administrative nightmare. Enough to awaken the old demons of the fiscal Big Brother.

What if the fatal weapon turned towards bitcoin? A scenario long considered unlikely is becoming plausible. Some texts under discussion in Brussels suggest that bitcoin, as a non-issuer asset, could be excluded from MiCA exemptions. It could soon become illegal in Europe . If its uses become undetectable or untraceable, it could be banned. And when financial freedom becomes a legal risk, then the whole spirit of crypto is challenged.