Europe’s review of the Markets in Crypto-Assets regulation has become a debate over how far rules should reach—and whether they can keep pace with crypto markets without closing them off. The European Commission opened its consultation on 20 May and closed it on 30 September 2026; responses from companies, regulators and financial institutions are now bringing disagreements into view. Circle wants changes to how MiCA treats stablecoin reserves and international issuance, while the Hyperliquid Policy Center argues that perpetual futures belong under existing derivatives rules. Aave founder Stani Kulechov, meanwhile, objects to proposals that could restrict stablecoin rewards or access to decentralised finance.
For newcomers, the stakes are practical. Regulatory choices can shape which tokens are available in Europe, how trading platforms operate and whether people can reach DeFi services through familiar providers. Imagine Maya, a first-time crypto user: a rule affecting reserves might influence the stablecoin she uses to transfer funds, while a decision on lending could determine which services her platform can offer. These are not simply technical disputes; they are competing views of investor protection, market access and innovation. As the European Union weighs possible next steps, the central question is whether its crypto regulation can address genuine risks while remaining workable for products built on public blockchains.
MiCA review: the main disputes in brief
Circle is seeking more flexible reserve requirements and a route for global stablecoins to operate through both European and foreign entities. Hyperliquid wants perpetual futures assessed as financial derivatives under MiFID II, based on what they do rather than the technology they use. Aave opposes proposals it says could restrict DeFi access and stablecoin rewards. Together, the submissions expose how different views of investor protection are driving the next phase of MiCA.
Why the European Union’s MiCA review matters
The consultation is intended to help the Commission assess how the regulation is working and whether further legislative proposals are needed. Its scope reaches beyond token issuance: stablecoins, lending, staking, decentralised finance and crypto derivatives all feature in the wider debate.
For users and businesses, the details can translate into concrete compliance challenges. A crypto company may need to adjust its services or legal structure, while customers could see changes in which products are offered to them. The debate also builds on ongoing discussions about the Union’s approach to decentralised services, including this coverage of the European Commission and MiCA’s treatment of DeFi.
Circle calls for more flexible MiCA stablecoin rules
Circle, the issuer of USDC and EURC, argues that MiCA should better accommodate widely used stablecoins with international operations. In its submission, the company points to a limited pool of regulated options: among the 25 largest stablecoins by market capitalisation, it says only three—USDC, USDG and EURC—are currently regulated under MiCA.
One proposal is to permit multi-issuance, under which a token could be issued by an EU-authorised entity alongside a related entity abroad. Circle also wants to replace the requirement to hold 30% of reserves in bank deposits—or 60% for significant stablecoins—with a more flexible liquidity standard. The company’s argument is that reserve rules should protect holders without needlessly limiting how issuers manage assets.
Looking further ahead, Circle supports an equivalence approach for certain foreign jurisdictions. Under such a system, an issuer supervised overseas might reach European customers through an authorised local entity, rather than being shut out of the market. The discussion is relevant to existing coverage of Circle’s MiCA position in France: market access and regulatory safeguards are closely linked.
Hyperliquid argues perpetual futures belong under MiFID II
The Hyperliquid Policy Center (HPC) takes aim at how regulators should classify on-chain perpetual futures, commonly called “perps.” These contracts let traders take leveraged positions without a conventional expiry date, making their economic features central to the HPC’s argument.
The group says the products should be assessed under MiFID II, the EU framework for financial instruments, rather than treated as a new category under MiCA. It argues that regulation should follow a product’s function, not whether it runs on a blockchain. The HPC also rejects automatically equating every perpetual contract with a contract for difference, and says on-chain markets can offer transparency through publicly viewable transaction data.
This is a case for technological neutrality: if two products perform a similar financial role, the underlying infrastructure alone should not decide which rules apply. For a hypothetical trader such as Maya, the outcome could affect which platforms offer perps in Europe and what protections accompany them. The key challenge is applying existing rules clearly without assuming that every on-chain product is identical.
Aave pushes back against stricter DeFi measures
The European Banking Authority has recommended stronger oversight of crypto-asset lending and borrowing, including some activities associated with DeFi. Aave founder Stani Kulechov has criticised regulatory positions that, in his view, could prohibit rewards on stablecoins or limit crypto-asset service providers from offering access to decentralised protocols.
Kulechov’s concern is that deciding which protocols can be made available to European users could lead to a more closed market. DeFi services often rely on open access and shared liquidity; restrictions that fragment participation could weaken those network effects. At the same time, lending and borrowing can expose users to risks such as volatile collateral and liquidation, so the regulatory debate also concerns how protections should work in practice.
The disagreement is therefore not simply about whether to regulate. It is about whether safeguards should focus on identifiable risks and responsible intermediaries, or extend to restricting access to protocols themselves. That distinction will shape how regulatory measures affect both innovation and user choice across European crypto markets.
Three competing priorities, one regulatory decision
Circle’s proposals focus on stablecoin liquidity and global access; Hyperliquid’s on consistent treatment of derivatives; Aave’s on keeping DeFi services accessible. Each raises a different question for policymakers: how to protect users, maintain market integrity and avoid rules that treat technology as a risk in itself.
For people just entering crypto, following the review is a useful reminder that product availability is shaped not only by market demand but also by the rules governing issuers and platforms. The outcome of the MiCA review will help determine how those priorities are balanced as the European Union considers its next steps.
