Europe’s next big crypto move won’t be MiCA 2.0. Instead, the European Commission is set to unveil proposals in December that aim to bring traditional financial assets onto blockchain.
Summary
- The Commission’s upcoming SIU proposals are expected to include measures for tokenizing equities, bonds, and derivatives.
- The EU’s DLT Pilot Regime, launched in March 2023, will be upgraded as a first step toward broader adoption of tokenized financial instruments in Europe.
Peter Kerstens, adviser to the European Commission and often dubbed the “father of MiCA,” told The Block in a recent interview that the Commission is preparing proposals for the Savings and Investment Union (SIU), which are expected to include measures for tokenizing traditional financial instruments.
Kerstens said tokenization could apply to equities, bonds, and derivatives, representing them as digital tokens on blockchain networks.
The aim of the SIU is to integrate Europe’s fragmented capital markets and channel savings into cross-border investments, using blockchain technology to increase efficiency and transparency.
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Peter Kerstens: “No MiCA 2.0 for now”
The remarks signal a regulatory shift away from pursuing a “MiCA 2.0” framework. While MiCA, which came into effect last year, primarily governs crypto issuers and service providers, Kerstens suggested that regulators should now prioritize real-world asset tokenization as part of broader market modernization, stating:
“I do think that what we should focus on — rather than trying to correct or improve MiCA — I think we should focus on something much bigger, much more important, which is the tokenization of financial instruments, also called real-world assets,” said Kerstens.
As a step toward advancing tokenization across European financial markets, Kerstens said the Commission intends to upgrade the DLT Pilot Regime. Launched in March 2023, the pilot provides a controlled environment for experimenting with tokenized securities, allowing regulators and institutions to test blockchain applications while maintaining investor protections.
Kerstens noted that insights from the pilot will help guide the broader adoption of tokenized financial instruments, laying the groundwork for a future in which distributed ledger technology becomes a core part of capital market infrastructure.
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