Key Proposal Submitted in EU Crypto Regulation Review

A policy committee active in the digital assets sector has formally submitted its feedback to the European Commission regarding the ongoing review of the Markets in Crypto-Assets (MiCA) regulation. This marks the committee's first official policy submission within a jurisdiction outside the United States.

Central Argument: A Unified Regulatory Approach for On-Chain Derivatives

The committee's filing centers on a clear recommendation: all on-chain perpetual contracts should fall under the existing EU regulatory framework for financial instruments, namely the Markets in Financial Instruments Directive II (MiFID II). This should apply regardless of the specific recording technology or the type of underlying asset involved.

The rationale is that perpetual contracts are fundamentally derivatives. Their economic function and risk profile align with those of traditional financial derivatives, making the well-established MiFID II framework a more efficient and proven regulatory home than creating entirely new rules from scratch.

Regulatory Vision: Enabling a Verifiable and Transparent Market

The committee notes that applying MiFID II principles to on-chain markets must account for their unique technological operation. The ultimate goal is to leverage regulation to provide EU investors access to deeper, continuously margined markets where all activity is subject to public verification.

This approach offers several potential benefits:

  • Enhanced Investor Protection: Clear legal status and regulatory requirements reduce uncertainty for participants.
  • Market Integration：Bringing crypto derivatives under the mainstream regulatory umbrella facilitates convergence with traditional finance.
  • Inherent Transparency: The verifiable nature of blockchain can naturally fulfill certain regulatory transparency demands.

This submission arrives as jurisdictions globally are refining detailed rules for crypto assets. The committee's proposal presents a concrete, operational blueprint for integrating fast-evolving DeFi products into traditional legal frameworks. How the European Commission weighs this argument will be closely watched by the industry.