MiCAR and beyond: regulating DLT-based assets, services and infrastructure in the EU

This article examines the evolving European Union regulatory framework for distributed ledger technology (DLT)-based assets, services and market infrastructures, focusing on the Markets in Crypto-assets Regulation (MiCAR) and the DLT Pilot Regime. These instruments represent the most comprehensive effort to integrate crypto-assets and DLT-based financial activities into the EU’s financial regulatory system. This framework functions through new asset classifications, harmonised licensing regimes, and tailored supervisory requirements. The article argues that, despite significant harmonisation in the regulation of crypto-assets and market actors, the EU framework remains ill-equipped to address the risks arising from on-chain infrastructures that enable the issuance and transfer of such assets. It highlights the structural limits of the current approach in responding to the decentralised nature of DLT-based financial ecosystems.