A function based case
In its consultation response, the Cardano Foundation said it opposed standalone MiCA regimes for protocol level DeFi, direct staking, lending, borrowing, prediction markets, perpetual futures and certain nonfungible token activities. The foundation argued that regulation should follow identifiable financial functions and risks, rather than apply new obligations because an activity uses blockchain technology.
The response was submitted on September 30, according to the foundation’s summary. It addresses the European Commission’s review of MiCA, the European Union’s framework for crypto asset issuers and service providers. The Commission opened its targeted consultation on May 20, 2026, and set September 30 as the deadline, according to the European Commission’s consultation notice.
The foundation’s central distinction is between direct participation in decentralized infrastructure and an intermediary that manages assets or makes decisions for clients. It argues that those activities may involve different risks, even when they use similar technical systems.
That distinction is particularly important for Cardano’s proof of stake network. The foundation presents direct ada delegation as a form of participation in network security in which holders can delegate stake without transferring custody of their assets or locking them. Users retain control of their funds while contributing to the operation of the network, according to the foundation.
A centralized staking provider, by contrast, may hold customer assets, pool them, or exercise discretion over how they are used. The foundation says that model should be assessed as an intermediary service rather than treated as equivalent to direct participation in the protocol.
The difference could affect the cost and availability of staking for European users. If direct delegation were placed under rules designed for custodial services, users could face additional disclosures or access restrictions even when no company controls their assets. If the rules instead focus on custody, discretion and customer relationships, regulated obligations would be more likely to fall on service providers.
MiCA and existing financial law
The foundation also called for a clearer boundary between MiCA and existing European financial legislation, especially the Markets in Financial Instruments Directive, known as MiFID II. It argued that tokens should be classified according to their substantive characteristics rather than their technical form or the way they are represented on a blockchain.
That issue matters for assets that can fit more than one category. A token may serve as a means of payment, represent an investment interest, or provide access to a service. The foundation’s approach would ask what economic function the asset performs and what risks it creates, rather than assume that blockchain representation requires a separate category.
The submission also sought greater legal certainty for hybrid tokens, global and multi issuer stablecoins, overlaps with payment services, environmental disclosures and cross border ownership rules for tokenized assets. These areas can create overlapping requirements when a crypto asset falls between MiCA and another EU framework.
On nonfungible tokens, the foundation supported keeping MiCA’s exclusion for genuinely unique assets. It rejected the idea that membership in a collection, fractionalization or later use by a third party should automatically alter an NFT’s regulatory classification. In its view, classification should turn on the asset’s substantive features and the activity around it.
Other regulators see gaps
The available material includes critical views from European regulators, but no opposing industry or civil society submission was provided for this article. Those regulatory views do not amount to a final decision, and they are not evidence that the foundation’s proposals have been accepted or rejected.
The European Securities and Markets Authority has called for changes to make MiCA clearer and safer, including proportionate requirements for staking, lending and borrowing. ESMA has also sought clearer criteria for genuinely decentralized activities and proposed a new regulated crypto asset service for firms that provide access to DeFi protocols.
That position suggests a different policy emphasis from the foundation’s. Rather than treating protocol level activity and intermediated access as one category, ESMA’s recommendation focuses on the firms that connect customers to decentralized systems. The practical question would be whether a provider is merely publishing software or is offering an organized service, managing customer relationships and taking responsibility for access.
The European Banking Authority has also identified staking and DeFi lending as relevant to the review. In its consultation response, the European Banking Authority discussed crypto lending and borrowing that are intermediated in EU member states. Its focus points toward activities where a firm stands between users and the financial arrangement, rather than toward every act carried out through a public network.
What happens next
The consultation does not itself change MiCA. The Commission must assess submissions before deciding whether to propose amendments or other measures. Any future proposal would then move through the EU legislative process, where the final text could differ materially from both the foundation’s response and the regulators’ recommendations.
For Cardano, the immediate issue is not a network governance vote, a treasury allocation or a change to the protocol. It is a question of market access and legal classification. Rules that distinguish direct delegation from custodial staking could preserve participation by ada holders while still regulating companies that hold assets or make decisions for them.
The unresolved question is where regulators will draw that line. The foundation wants the perimeter to expand only when a recognizable financial function or risk justifies it. ESMA and the EBA, based on the positions available here, are more focused on closing potential gaps around access, lending, borrowing and staking services.
Europe’s MiCA review will therefore test whether a technology neutral framework can accommodate decentralized networks without creating a broad exemption for firms that use them. For Cardano’s ecosystem, the answer could shape how delegation, native assets, DeFi applications and infrastructure providers operate across the European market.
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