The European Union is shifting its regulatory focus in crypto. Instead of working on a “MiCA 2.0” update, the European Commission is preparing new proposals aimed at bringing traditional financial assets onto blockchain networks. The measures, expected in December, will be part of the Savings and Investment Union (SIU) initiative.
A shift in regulatory priorities
Peter Kerstens, senior adviser at the European Commission and often referred to as the “father of MiCA,” confirmed the move in a recent interview. According to Kerstens, tokenization of assets such as equities, bonds, and derivatives will take center stage. These assets could be represented as digital tokens, enabling greater efficiency, transparency, and cross-border investment opportunities.
MiCA, which came into force in 2023, laid the groundwork for regulating crypto issuers and service providers. However, rather than rushing into a second version of the framework, EU policymakers now see more potential in upgrading financial markets through tokenization.
The role of the DLT Pilot Regime
To support this transition, the Commission plans to enhance the DLT Pilot Regime, launched in March 2023. The pilot offers a controlled environment where institutions can experiment with tokenized securities while regulators monitor investor protection.
Insights gained from these pilots are expected to inform broader adoption, paving the way for distributed ledger technology (DLT) to become a permanent part of Europe’s capital market infrastructure.
Why tokenization matters
Tokenizing real-world assets (RWAs) could help solve Europe’s long-standing challenge of fragmented capital markets. By digitizing securities and enabling seamless cross-border trading, the EU hopes to channel household savings into productive investments, boosting growth and competitiveness.
While the crypto industry anticipated a new MiCA framework, this regulatory pivot shows Europe’s intent to leverage blockchain for broader financial modernization. For now, the future lies not in MiCA 2.0, but in transforming how traditional assets are issued, traded, and settled.
