ESMA's MiCA Review Response: DeFi, Stablecoins, and What Changes for Compliance
The European Securities and Markets Authority has submitted its response to the European Commission's public consultation on the first formal review of the Markets in Crypto-Assets Regulation, and the document is not a rubber stamp. ESMA is pushing for substantive changes to MiCA compliance crypto requirements, targeting gaps that have opened up since the regulation took effect: non-compliant stablecoins still accessible through regulated venues, DeFi activity sitting outside any authorisation perimeter, inconsistent token classification across member states, and influencer-driven retail marketing that the current text handles imprecisely. For accounting firms, auditors, and CFOs carrying crypto on the balance sheet, every one of these proposals carries a practical implication.
Why ESMA Is Acting Now
MiCA came into full effect for crypto-asset service providers at the end of 2024, but the regulation always contained a built-in review clause. The European Commission opened a public consultation as part of that process, and ESMA's response is its opportunity to shape what the next version of the text looks like before the Commission drafts legislative amendments.
ESMA frames its proposals around three priorities: simplifying parts of the framework that create unnecessary friction for regulated firms, strengthening supervisory tools where the current text leaves gaps, and building a pathway for genuinely new activity such as DeFi and tokenised securities that MiCA did not anticipate in its current form. That framing matters for compliance teams because it signals ESMA is not seeking wholesale revision. It is asking for targeted additions and clarifications, which means firms can begin gap analysis against a relatively defined set of changes.
Stablecoin Compliance: The Non-Compliant Stablecoin Problem
One of the sharpest proposals in ESMA's response concerns stablecoins that do not meet MiCA's requirements for e-money tokens or asset-referenced tokens. Under the current framework, a regulated CASP can, in practice, offer services that touch non-compliant stablecoins, creating what ESMA describes as a route for regulatory arbitrage. ESMA wants that closed explicitly.
Proposed Prohibition on Non-Compliant Stablecoin Services
ESMA recommends introducing an explicit rule prohibiting regulated crypto firms from providing services linked to stablecoins that do not comply with MiCA. That is a meaningful change for any CASP that currently lists, custodies, or settles in stablecoins issued outside the EU authorisation perimeter or by issuers who have not sought MiCA recognition.
For accounting and audit purposes, the implication is direct. Any stablecoin holding currently carried on a client's balance sheet needs a compliance review: is the issuer MiCA-authorised? If not, and if this rule is adopted, the asset may cease to be legally serviceable within EU-regulated infrastructure, which affects both its liquidity assumption and its classification. Stablecoin accounting entries that treat a token as a near-cash equivalent need to be stress-tested against this scenario.
This also connects to broader stablecoin accounting questions that auditors are already navigating. For context on how major institutional players are expanding stablecoin payment infrastructure in parallel, see our coverage of stablecoin accounting considerations after Citi and Coinbase expand payments.
Supervisory Powers Over Third-Country Firms
ESMA also wants reinforced powers to act against third-country firms that solicit EU investors without MiCA authorisation. The proposed tools include the ability to detect, block, and deactivate fraudulent websites and to freeze crypto assets where there is reasonable suspicion of market abuse or terrorist financing. This is a significant escalation of cross-border supervisory reach and has AML workflow implications for any firm whose clients transact with counterparties outside the EU regulatory perimeter.
DeFi: From Regulatory Gap to a New Service Category
MiCA's current text does not meaningfully regulate decentralised finance. ESMA's response acknowledges this openly and proposes two interventions.
Criteria for Genuine Decentralisation
First, ESMA recommends developing clearer criteria for determining when an activity can be considered genuinely decentralised. This matters because the distinction determines whether MiCA applies at all. A protocol that is nominally decentralised but governed or controlled by an identifiable entity could fall within scope; one that meets defined decentralisation thresholds would not. Until those criteria exist, firms building or auditing DeFi-adjacent structures operate in a grey zone.
For DeFi accounting purposes, the classification question is already live. Revenue streams from liquidity provision, staking, and lending sit in different accounting buckets depending on whether the underlying activity is conducted through a regulated entity or a genuinely decentralised protocol. ESMA's proposed criteria would give auditors a regulatory anchor for that determination, making the accounting treatment more defensible under IFRS and reducing the risk of a future reclassification.
A New Regulated Category: DeFi Access Services
Second, and more significantly, ESMA proposes creating a new regulated crypto-asset service category for firms that provide users with access to DeFi protocols. This is a novel authorisation category that does not currently exist under MiCA. If adopted, any intermediary, including wallet providers, aggregators, or front-end interfaces, that routes users into DeFi protocols would need to consider whether they fall within scope.
The compliance and accounting implications are substantial. A newly regulated DeFi access service would need authorisation, a compliance programme, and potentially client asset segregation rules applied to any digital assets handled in the access chain. Revenue recognition for such services would need to be reassessed under the applicable accounting framework, as would the balance sheet treatment of any assets temporarily held.
Teams already tracking ESMA's supervisory approach should cross-reference this with our earlier analysis of ESMA's 2027 MiCA supervision priorities for CASPs, which outlines the near-term examination focus even before these proposed changes are enacted.
Token Classification: Binding Opinions and Hybrid Tokens
Inconsistent token classification across EU member states has been a live problem since MiCA authorisation began. The same token has, in some cases, received different regulatory treatment depending on the national competent authority conducting the review. ESMA's response targets this directly.
Binding Classification Opinions
ESMA proposes that it be granted the power to issue binding opinions on token classification. This would mean that where a classification question is referred to ESMA, its determination would be binding on all national competent authorities, removing the possibility of the same token being treated differently in, say, France and Germany.
For audit and accounting teams, this is a significant development. Token classification determines the applicable accounting standard. A token classified as a financial instrument sits under IFRS 9; one classified as an intangible asset sits under IAS 38. Inconsistent classification across jurisdictions creates hedging and reporting complexity for multi-entity structures. Binding ESMA opinions would reduce that complexity, but they also mean that an incorrect initial classification carries a harder legal edge once ESMA has spoken.
Hybrid Tokens and New Product Rules
ESMA also recommends adopting explicit classification rules for hybrid tokens, instruments that combine features of different asset categories and currently fall into ambiguous territory. As tokenisation of real-world assets accelerates, hybrid structures are becoming more common. Firms holding or auditing such instruments need a clear classification framework, and ESMA is signalling that the MiCA review is the vehicle for providing it.
Marketing Rules: Influencers and Third-Party Promotion
ESMA's response calls for stricter rules governing the marketing of crypto-assets, with particular focus on promotion carried out by influencers and third parties acting on behalf of issuers or CASPs. The current MiCA marketing provisions apply to the regulated firm, but they do not always reach clearly into third-party promotion arrangements where the firm has paid or incentivised an influencer to promote a token or service.
What Stricter Marketing Rules Mean for Compliance
The proposed tightening would require clearer disclosure of costs, risks, rewards, collateral arrangements, and potential losses in any promotional communication. For compliance officers, this extends the due-diligence perimeter. Marketing contracts with influencers or affiliates would need to be reviewed against the enhanced disclosure standard, and the regulated firm would likely remain responsible for ensuring the third-party communication meets the requirement.
From an accounting perspective, influencer and affiliate marketing arrangements that are structured as token-based compensation also raise their own classification questions. If a firm issues tokens to an influencer as payment for promotional services, the accounting treatment of that issuance needs careful attention under IFRS 2 (share-based payments analogy) or as a cost of sales depending on the facts.
Simplification: What Gets Easier Under the Proposals
Not all of ESMA's proposals add burden. In line with the EU's broader simplification agenda, the response recommends streamlining elements of the existing framework.
White Paper Notifications and Authorisation
ESMA proposes simplifying the crypto-asset white-paper notification procedure and reducing duplicative authorisation requirements for firms that are already regulated under other EU financial services legislation. For an investment firm already authorised under MiFID II that wishes to offer crypto-asset services, the current MiCA process can require substantial parallel authorisation work. Streamlining this would reduce the cost and time of entry for established regulated firms, which matters for accounting firms advising clients on market entry strategy.
ESMA also recommends improving the consistency of prudential requirements across member states, which would reduce the compliance overhead for CASPs operating cross-border. More consistent capital and liquidity requirements simplify the consolidated prudential accounting and reduce the risk of surprises during group-level audit.
Tokenised Securities and On-Chain Settlement: The Horizon Issue
Beyond the immediate MiCA review, ESMA uses its response to flag a longer-term structural gap: there is no integrated EU framework for tokenised securities and on-chain settlement. ESMA calls for a dedicated framework that can support the development of a European tokenised capital market and facilitate cross-border activity.
This is not a near-term compliance obligation, but it is a strategic signal. Firms building or advising on tokenised asset structures should track this closely. The accounting treatment of tokenised securities, particularly where settlement occurs on-chain and the securities themselves may be hybrid instruments, remains one of the more complex areas of digital asset accounting under both IFRS and national GAAP. A dedicated EU framework would eventually provide the regulatory anchors that auditors currently have to construct from first principles.
Frequently Asked Questions
When will ESMA's proposed MiCA changes become law?
ESMA's response is an input to the European Commission's MiCA review consultation, not binding legislation. The Commission will consider all consultation responses before drafting proposed legislative amendments. Those amendments would then go through the standard EU co-legislative process involving the European Parliament and Council, a timeline that typically runs to several years. Firms should monitor the Commission's follow-up for an indicative schedule.
Does the proposed DeFi access service category apply to wallet providers?
ESMA's proposal is framed around firms that provide users with access to DeFi protocols, which could include front-end interfaces, aggregators, and potentially certain wallet services if they route transactions into DeFi protocols. The precise perimeter will depend on the technical definition adopted in any legislative text. Firms with DeFi-adjacent services should begin assessing their operational model against a broad reading of the proposed category now.
How should we account for stablecoins that may become non-compliant under the new rules?
Under IFRS, the accounting classification and measurement of a stablecoin holding depends on the instrument's contractual characteristics and the entity's business model. If a stablecoin risks losing its status as a serviceable asset within EU-regulated infrastructure, that affects its liquidity and potentially its fair value. Auditors should consider whether any impairment indicators arise and whether the going-concern assumption for that specific holding remains supportable. Contingent liability disclosures may also be relevant for firms with significant non-compliant stablecoin exposures.
What do binding ESMA token classification opinions mean for firms that have already classified tokens under existing guidance?
If ESMA issues a binding opinion that reclassifies a token differently from how a firm has treated it, the firm would need to restate its accounting treatment prospectively and potentially retrospectively, depending on the materiality and the applicable standard. This is a risk that should be flagged in audit planning and in management's assessment of accounting estimates. Firms should build a review trigger into their token classification process so that any ESMA binding opinion automatically generates a reassessment.
Do the proposed influencer marketing rules create any accounting obligations?
Directly, the proposed rules are regulatory rather than accounting in nature. However, firms that compensate influencers or affiliates with tokens or token rights need to account for those arrangements carefully. Token-based compensation to third parties for services may need to be recognised as an expense at fair value under IFRS, with corresponding implications for the firm's token issuance disclosures. Enhanced regulatory scrutiny of these arrangements also raises the audit evidence bar for documenting the commercial substance of marketing contracts.