But critics argue the regulation disproportionately impacts smaller firms and experimental projects. Many decentralized finance (DeFi) protocols also remain in a gray zone, as MiCA’s exemption for fully decentralized systems is still vague in practice. This leaves hybrid platforms uncertain about whether they will be treated as regulated intermediaries.

EU regulators, however, maintain that the framework is balanced and risk-based, designed to improve investor protection without stifling innovation. Still, whether MiCA ultimately strengthens Europe as a global crypto hub or pushes startups toward more flexible jurisdictions remains an open question.