The Cardano Foundation has formally requested that the European Union refrain from creating new, separate regulations for decentralized finance and staking. In a 19-page submission to the European Commission dated September 30, the organization argued that existing financial laws are sufficient to govern these activities based on their specific functions and risks.
The foundation emphasizes that regulation should focus on the substance of an activity rather than the underlying technology. It highlights that delegating ADA tokens to secure the network differs significantly from staking services managed by intermediaries, as users retain custody and control of their assets throughout the process.
Furthermore, the foundation warned that expanding the Markets in Crypto Assets Regulation (MiCA) could lead to overlapping requirements and inconsistent interpretations across EU member states. This regulatory ambiguity, according to the foundation, creates significant uncertainty for crypto businesses operating within the region.
The European Securities and Markets Authority (ESMA) is currently evaluating additional safeguards for lending, borrowing, and staking, as well as a potential new category for firms providing access to DeFi protocols. Meanwhile, the Cardano Foundation is also advocating for regulatory clarity in the United States, recently joining five other organizations in a letter to the SEC.
