The European Securities and Markets Authority has called for new rules governing decentralized finance and tokenized securities, including a dedicated framework for firms that give users access to DeFi protocols. The proposals, part of the ongoing MiCA review, also push for greater supervisory power over anti-money laundering enforcement.
ESMA calls for a DeFi access framework
ESMA has called for DeFi and tokenized securities regulation, while also seeking more supervisory power to track and enforce anti-money laundering laws in the sector. The regulator wants clearer criteria for determining which DeFi activities count as genuinely decentralized.
It is also recommending a new regulated crypto-asset service category for firms that intermediate user access to DeFi protocols. Some of ESMA's proposals were slightly similar to those of the European Banking Authority, underscoring a shared push among EU regulators for an expanded crypto regime by 2027.
The EBA has separately warned that DeFi platforms are being used to hunt for stablecoin yield, including some unlicensed stablecoins, and has called for DeFi interface regulation to close that arbitrage loophole. It also wants lenient stablecoin bank reserve requirements and a new cyber-certification framework so users can gauge a DeFi venue's resilience to hacks.
On enforcement, ESMA is asking for powers to deactivate fraudulent websites and freeze crypto funds flagged for violating anti-money laundering laws. The watchdog also pressed for a new crypto-asset classification system.
Tokenized securities push mirrors the U.S.
ESMA reinforced the need to harmonize rules for the region's tokenized capital markets, aiming to support an integrated European tokenized capital market and cross-border activity. The move follows the U.S. SEC, which is pushing its own tokenized securities framework through an "Innovation Exemption" to export its capital markets rules, as it previously did with stablecoins.
Tokenized securities have already reached $4.4 billion, or 1% of stablecoin supply, according to former Ark Invest crypto lead Chris Burniske, who expects the growth to continue. Binance CEO Richard Teng has said the market could grow to $349 billion by 2030, a 79-fold increase from current levels.
Source: AMBCrypto
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