Policy Expert Says EU DeFi Clarification Is Coming in 2026

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The Markets in Crypto-Assets (MiCA) framework, which provides protections for crypto users and businesses in the EU since it went into effect on 30 December 2024, primarily addresses centralized crypto service providers. However, it left the status of fully decentralized finance (DeFi) unclear. 

Addressing this potential oversight, one policy expert revealed the European Union is believed to be advancing its regulatory plans for DeFi, starting by legally clarifying what DeFi is in mid-2026. 

Speaking at Cointelegraph’s Chain Reaction X Spaces show on 4 June 2025, senior policy lead at the European Crypto Initiative (EUCI), Vyara Savova, said policymakers are shifting their attention to regulating DeFi. 

The status of DeFi protocols is currently ambiguous and theoretically outside the scope of MiCA. Meanwhile, what the EU understands by DeFi also remains unclear.

The original MiCA framework extended Know Your Customer (KYC) obligations to DeFi platforms, aligning them with traditional financial service providers. However, Recital 22 of the legislation introduced extra ambiguity by exempting “fully decentralized” crypto-asset service providers from the regulation’s scope. 

This exemption has led to ongoing uncertainty, as the term “fully decentralized” remains undefined, leaving market participants unclear about the compliance expectations for various DeFi protocols.

The EU’s clarification of DeFi could prove pivotal in shaping how protocols operate and comply across the EU and beyond.