EC MiCAR Review: What European CASPs Should Submit

ByOfficer

Last updated: May 2026

On 20 May 2026, the European Commission opened two parallel consultations on whether the Markets in Crypto-Assets Regulation (MiCAR, Regulation (EU) 2023/1114) remains fit for purpose. One is a public consultation open to anyone. The other is a targeted consultation with more than 80 technical questions aimed directly at crypto-asset issuers, crypto-asset service providers (CASPs), financial institutions, supervisors, and industry bodies. Both consultation pages list 31 August 2026 as the deadline, and the targeted consultation specifies 23:59 CEST.

This is the first structured opportunity for licensed European CASPs to tell the Commission what is working, what is not, and what needs to change. The Commission is explicit: responses may feed a legislative proposal to amend MiCAR. Firms that stay silent will live with whatever the Commission drafts next.

I have spent time working through the targeted consultation document, which runs to more than 80 questions across four parts. The structure is deliberate. It covers everything from token classification boundaries to DeFi and staking, which MiCAR currently does not regulate. What follows is a practical walkthrough of each part and the submission themes where European CASPs can add the most value.

Related reading: MiCAR reporting obligations for crypto-asset service providers

Why This MiCAR Review Consultation Matters

MiCAR started applying in part from 30 June 2024 and in full from 30 December 2024. Articles 140 and 142 of the regulation require the Commission to report to the European Parliament and the Council on MiCAR’s application and on developments not originally covered. Article 140(1) sets a deadline of 30 June 2027 for the full report, with an interim report due by 30 June 2025. Article 142(1) separately requires a report on matters left outside MiCAR’s scope. Both reports may be accompanied by legislative proposals.

The Commission is not running this consultation in a vacuum. Digital asset markets have changed substantially since MiCAR was designed in 2020-2022. Traditional financial institutions are moving into crypto services. Other jurisdictions have adopted or revised their own frameworks. The Commission states directly that it wants to “compare and contrast the EU framework for crypto assets with the more recent frameworks of other jurisdictions and with market developments.”

CASPs that have been through the authorisation process in their home Member State have first-hand experience that the Commission cannot get from desk research. The real operational friction, the ambiguous classification edges, the reporting burdens that do not produce useful supervisory data: these are the details that shape a good consultation response. The risk of not responding is that the next iteration of MiCAR gets built on assumptions rather than practitioner evidence.

The Two Consultations: Public and Targeted

The Commission launched two separate instruments. The public consultation is hosted on the Have Your Say portal and is designed for a broad audience, including retail users and civil society. The targeted consultation is a more detailed questionnaire covering legal and technical questions, hosted on the DG FISMA consultations page.

CASPs should respond to both. The targeted consultation is where the substance lives, but the public consultation counts for political visibility. Only responses submitted through the online questionnaires will be included in the Commission’s summary report. Email submissions or position papers sent separately will not count unless accompanied by the formal questionnaire response.

One common mistake: firms treat the targeted consultation as a compliance-team exercise and submit thin, safe answers that do not engage with the technical questions. The Commission explicitly asks for “a clear and detailed narrative, demonstrated by data (where possible), concrete examples, legal references and qualitative evidence.” Generic support or opposition to MiCAR will not move the needle.

Part 1: Scope, Definitions, and Token Classification

The first part of the targeted consultation tackles the boundary problem that has caused the most confusion since MiCAR went live: which assets fall under MiCAR and which fall under MiFID, the Prospectus Regulation, or other sectoral legislation?

Question 1 asks directly whether crypto-assets qualifying as financial instruments under MiFID II should remain under sectoral legislation or whether all assets recorded on distributed ledgers should fall under MiCAR. This is a fundamental architectural question. CASPs that also hold MiFID licences, or that have rejected token listings because of classification uncertainty, should describe those specific cases.

Question 2 asks whether ESMA’s Article 2(5) guidelines and the joint ESA classification test have reduced uncertainty in practice. I have seen firms spend weeks on classification analysis for a single token, only to reach a different conclusion than their NCA. If that has been your experience, say so and name the borderline categories that remain difficult. The Commission needs concrete examples, not abstract agreement that “more clarity would be helpful.”

The white paper regime under Title II also comes under review. Questions cover whether the current exemptions (offers to fewer than 150 persons per Member State, offerings under EUR 1 million, qualified investors) are appropriate. CASPs that have found the exemption thresholds too narrow or too broad for their business model should explain the practical impact with numbers.

Part 2: Asset-Referenced Tokens and E-Money Tokens

Part 2 is the longest section, covering ARTs and EMTs across reserve requirements, prudential regime, significance thresholds, redemption rights, and stablecoin-specific risks. It runs from Question 9 through Question 44, opening with the future role of stablecoins and the calibration of issuer own-funds requirements (Questions 9 to 11).

One striking question: Question 12 notes that after nearly two years of MiCAR being in effect, no ARTs have been licensed. The Commission asks what the primary barriers are. This is worth a substantive response from any firm that considered issuing an ART and decided against it. Likely barriers include prudential requirements, reserve composition rules, the interest prohibition under Article 40, and the interaction with e-money legislation.

On reserves, Question 14 asks whether MiCAR’s reserve-of-assets requirements for ARTs are appropriate. The requirement for issuers of significant ARTs to hold at least 60% of reserves in credit institution deposits deserves attention from firms that have modelled reserve management costs. If the 60% deposit floor creates concentration risk or reduces yield to the point where ART issuance is economically unviable, that is exactly the type of evidence the Commission is collecting.

Questions 20-23 cover the interest prohibition and redemption rights. The ban on granting interest or other benefits linked to the length of time a holder holds EMTs or ARTs (Article 40 for ARTs, Article 50 for EMTs) has been controversial. Some industry participants argue it puts EU stablecoins at a competitive disadvantage against non-EU alternatives. CASPs that have observed customer migration to non-EU stablecoins because of the yield differential should document that pattern.

The stablecoin crisis management questions (24-26) ask about recovery and redemption plans under Articles 46 and 47, and whether EMT-issuing e-money institutions should face additional safeguards given that EMIs are not subject to bank resolution regimes. Firms that have had to think through what happens to client holdings if an EMT issuer fails should share their analysis. The gap between EBA MiCA requirements for ART and EMT issuers and the practical crisis management framework is a real concern.

Questions 27-42 deal with global stablecoins, multi-issuance models, and potential equivalence regimes for third-country stablecoin issuers. If your CASP lists a non-EU stablecoin and you have had to work through the regulatory treatment of that listing, describe the process and the ambiguities you encountered.

Part 3: The CASP Framework

Part 3 is the section most directly relevant to authorised CASPs. It covers the adequacy of the current service definitions, prudential requirements, conduct rules, and the interface between MiCAR and other financial legislation.

Question 45 asks whether the list of crypto-asset services in Article 3(16) of MiCAR is comprehensive enough. Since MiCAR was drafted, new service models have emerged, including staking-as-a-service, crypto lending platforms, and yield aggregation. If your firm offers services that sit awkwardly within the current definitions, or if you have declined to offer services because the regulatory classification is unclear, explain the gap.

The prudential regime comes under scrutiny in Questions 49-51. The current minimum capital requirements (EUR 50,000 to EUR 150,000 depending on the class of service) and the ongoing own funds requirements have drawn criticism from both directions. Some argue they are too low to ensure adequate protection. Others argue they are disproportionate for smaller CASPs that handle limited volumes. If your own funds calculations produce results disconnected from your actual risk profile, share the data.

Question 52 is significant for reporting teams: should CASPs report regularly on their activities? MiCAR currently does not impose periodic activity reporting on CASPs beyond ad hoc supervisory requests and the obligation to report suspected market abuse. The Commission is asking whether a structured reporting regime should be introduced. Firms that have received ad hoc data requests from their NCA know how disruptive unstructured information requests can be. A well-designed periodic reporting framework might actually reduce burden compared to constant one-off requests, but only if the templates are proportionate. This is worth a detailed response from anyone who has been through a supervisory information request cycle.

Questions 53-56 cover environmental and sustainability disclosure (Question 53), the interface with DORA and cybersecurity (Question 54), the interplay with the revised Payment Services Directive following its recent review (Question 55, PSD3), and whether MiCAR unduly restricts CASP clients’ access to non-EU and global liquidity pools (Question 56). Firms running both a CASP licence and a payment institution or e-money licence often face overlapping or contradictory requirements. The EBA’s no-action letter on the PSD2/MiCAR interplay addressed some issues, but implementation-level friction remains. Document specific cases where compliance with one framework creates conflicts with another.

Part 4: Policy Areas Beyond MiCAR’s Current Scope

Part 4 is forward-looking. It covers policy areas that MiCAR does not currently regulate but that the Commission is considering bringing into scope.

Questions 59-65 deal with decentralised finance (DeFi). The Commission asks about the criteria for determining whether a DeFi protocol is “truly decentralised” and whether fully decentralised protocols present risks that MiCAR should address. It also floats the idea of certification schemes for DeFi protocols. CASPs that interact with DeFi protocols, whether through aggregation, bridging, or offering DeFi access to clients, should describe the compliance challenges they face when the counterparty is a smart contract rather than a regulated entity.

Staking, lending, and borrowing are covered separately. These activities have grown substantially since MiCAR was drafted and are offered by many CASPs as part of their service suite, but the regulatory treatment varies across Member States. If your NCA has taken a position on whether staking constitutes a crypto-asset service under MiCAR’s current definitions, describe that interaction. Divergent national interpretations are precisely the evidence the Commission needs to justify harmonisation.

NFT questions probe whether the current MiCAR exclusion for unique, non-fungible tokens remains appropriate. The exclusion is narrower than many assume: NFTs issued in large series or collections may not qualify. CASPs that have had to assess whether specific NFT collections fall within or outside MiCAR should describe the assessment process and its outcome.

Part 4 does not stop at NFTs. It also asks whether prediction markets and perpetual futures on crypto-assets should sit under MiCAR or MiFID, how tokenised deposits should be treated (including under the CRD/CRR framework and deposit-guarantee schemes), and how to handle the private-law and conflict-of-law treatment of tokens, including whether the EU should legislate to increase legal certainty over on-chain ownership and transfers. Firms with a banking or e-money affiliation should not overlook the tokenised-deposit and legal-certainty questions, which carry direct prudential and insolvency implications.

Practical Submission Themes for European CASPs

Reading through the consultation, several themes emerge where CASP submissions can be most impactful.

Authorisation experience is the first. The MiCAR authorisation process has varied significantly across Member States. Some NCAs processed applications within months. Others took much longer, with extensive back-and-forth on documentation that was not clearly specified in the Level 2 measures. Firms that went through authorisation in one Member State and then sought to passport into others can describe whether the cross-border notification process worked smoothly or created delays. Divergent NCA interpretations of the same Level 2 requirements are a direct input to the Commission’s assessment of whether the single market for crypto services is functioning.

Proportionality is a recurring thread. The consultation asks about it in multiple places: prudential requirements, reporting burden, white paper obligations, reserve requirements. Smaller CASPs with limited service offerings may face the same compliance infrastructure costs as large multi-service providers. If the per-service capital requirements or the operational resilience standards create a de facto barrier to entry that exceeds the regulatory objective, quantify that with your own compliance cost data.

Reporting and data burdens deserve specific attention. Question 44 asks whether issuers need further standardisation of reporting requirements. Question 52 asks whether CASPs should report regularly. If your firm files reports under multiple EU frameworks (MiCAR, CARF for crypto tax reporting, AML/CFT, potentially DORA), describe the overlap and the data elements you report multiple times to different authorities in slightly different formats. The Commission’s simplification agenda creates an opening to argue for consolidated or interoperable reporting.

Market abuse surveillance is another area where CASPs hold unique operational evidence. MiCAR’s market abuse provisions (Title VI) require CASPs to detect and report suspicious orders and transactions. In practice, the surveillance tools and methodologies available for crypto markets are less mature than those for traditional financial instruments. If your surveillance systems generate excessive false positives, or if the definitions of inside information and market manipulation do not map cleanly onto crypto market structures, explain why.

Custody and client-asset segregation obligations under MiCAR are tested daily by CASPs holding crypto-assets on behalf of clients. The interaction between MiCAR custody requirements and national insolvency law is not fully harmonised. Firms that have sought legal opinions on the treatment of client crypto-assets in an insolvency scenario in their home jurisdiction should consider sharing the conclusions (at a general level) to illustrate the remaining legal uncertainty.

What Not to Submit

Some common pitfalls in regulatory consultation responses are worth flagging.

Do not submit position papers that only state “MiCAR should be simplified” without specifying which provisions, why they are burdensome, and what a proportionate alternative looks like. The Commission receives hundreds of generic responses. Specific, evidence-based submissions get read.

Do not treat the targeted consultation as a lobbying exercise for deregulation. The Commission is open to simplification where burdens exceed benefits, but the political context matters. Crypto markets have been through multiple fraud events and platform failures since MiCAR was drafted. Submissions that ignore investor protection concerns will not be taken seriously. The strongest responses acknowledge the regulatory objective and propose a better way to achieve it.

Do not assume the CASP supervision question is in scope. The Commission explicitly states that CASP supervision arrangements are covered under the separate Market Integration and Supervision Package (MISP) and are outside the scope of this consultation. Keep supervision comments for that separate process.

Timeline and Process

Both consultation pages list 31 August 2026 as the deadline, and the targeted consultation specifies 23:59 CEST. Responses must be submitted through the online questionnaires. The targeted consultation is available on the DG FISMA consultations page. The public consultation runs on the Have Your Say portal.

The Commission will publish authorised responses and produce a summary report. The feedback will inform the Article 140 report due by 30 June 2027, which may be accompanied by a legislative proposal to amend MiCAR.

For CASPs with internal governance processes, three months is not generous. The targeted consultation contains more than 80 questions. A quality response requires input from legal, compliance, operations, and commercial teams. Starting the internal coordination now, rather than in August, is the difference between a substantive submission and a rushed checkbox exercise.

Questions about the consultation or issues with the online questionnaire can be directed to fisma-mica-review@ec.europa.eu.

Frequently Asked Questions

Who should respond to the EC MiCAR review consultation?

The targeted consultation is designed for digital asset industry representatives (CASPs, crypto-asset issuers), public authorities (NCAs, ESAs, central banks, finance ministries), financial institutions, technology providers, academia, and industry bodies. The public consultation is open to anyone, including retail users. Licensed CASPs across all EU Member States should respond to both.

What is the deadline for submitting responses?

Both consultation pages list 31 August 2026 as the deadline, and the targeted consultation specifies 23:59 CEST. Only responses submitted through the official online questionnaires will be counted.

Does this consultation cover CASP supervision arrangements?

No. The Commission explicitly excludes CASP supervision from this consultation because it is covered under the separate Market Integration and Supervision Package (MISP). Submissions should focus on the regulatory framework itself: service definitions, prudential requirements, conduct rules, and reporting obligations.

What are the four parts of the targeted consultation?

Part 1 covers scope, definitions, and Title II crypto-assets (token classification, white paper regime, exemptions). Part 2 covers ARTs and EMTs (reserves, prudential regime, significance thresholds, redemption, stablecoin risks, global stablecoins). Part 3 covers the CASP framework (service definitions, capital requirements, conduct rules, reporting, and interfaces with environmental disclosure, DORA, and PSD3). Part 4 covers areas beyond current MiCAR scope: DeFi, staking, lending and borrowing, NFTs, prediction markets, perpetual futures, tokenised deposits, and the legal and conflict-of-law treatment of tokens.

Will the consultation lead to changes in MiCAR?

The consultation feeds the Commission’s Article 140 report on MiCAR application, due by 30 June 2027. The regulation explicitly states that this report may be accompanied by a legislative proposal to amend and complement MiCAR. Whether changes happen depends on the evidence collected, but the legal pathway for amendment is built into the regulation itself.

Can CASPs submit a joint industry response instead of individual responses?

Industry associations can and should submit responses. But individual CASP responses carry weight precisely because they contain firm-specific operational evidence that industry associations cannot provide at the same level of detail. Both are valuable. Individual responses backed by data and concrete examples tend to have more impact in the Commission’s analysis.

Does the consultation affect the existing MiCAR obligations currently in force?

No. The consultation is about the future of the framework. All current MiCAR requirements remain in force. CASPs must continue complying with existing authorisation conditions, conduct rules, prudential requirements, and market abuse obligations while the review process runs.

Related Articles

Key Takeaways

  • The European Commission opened both a public and a targeted consultation on MiCAR’s functioning on 20 May 2026, with a deadline of 31 August 2026.
  • The targeted consultation contains more than 80 questions across four parts: scope and definitions, ARTs and EMTs, the CASP framework, and areas beyond MiCAR’s current scope (DeFi, staking, lending, NFTs, prediction markets, perpetual futures, tokenised deposits, and the legal treatment of tokens).
  • Responses feed the Commission’s Article 140 report due by 30 June 2027, which may include a legislative proposal to amend MiCAR.
  • CASPs should submit firm-specific evidence on authorisation friction, classification ambiguities, prudential proportionality, and reporting overlaps across EU frameworks.
  • The consultation explicitly excludes CASP supervision, which is covered separately under the Market Integration and Supervision Package.
  • Only responses submitted through the official online questionnaires count. Position papers or email submissions alone will not be included in the summary report.
  • Three months is tight for a quality submission covering more than 80 technical questions. Internal coordination across legal, compliance, and operations should start now.

Sources and References

  • Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets (MiCAR) – EUR-Lex
  • European Commission, “Commission seeks feedback on the functioning of EU crypto-assets rules,” 20 May 2026 – DG FISMA news page
  • Targeted consultation on the review of MiCA Regulation, including consultation document (PDF, 636 KB) – DG FISMA consultations page
  • Public consultation: Crypto-asset markets – evaluation of the EU legal framework – Have Your Say portal

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.

Similar Posts