As Europe prepares for a major shift in its crypto landscape, one of the key minds behind the Markets in Crypto-Assets (MiCA) regulation is suggesting a pivot in strategy. Instead of trying to police the decentralized finance (DeFi) space, Peter Kerstens, an adviser at the European Commission, believes the European Union should turn its attention toward real-world asset (RWA) tokenization.
This insight comes at a critical juncture for the bloc. The European Commission launched a public consultation on MiCA in May, actively seeking industry feedback through August 31 to help shape the next phase of its digital asset strategy. At the same time, MiCA is nearing the end of its transitional period on July 1, a hard deadline after which crypto asset service providers must secure a MiCA license or stop serving EU clients entirely. While the current review is exploring emerging risk areas like DeFi, Kerstens argues that doubling down on decentralized protocols might be the wrong move.
Why Regulating DeFi Might Be a Wild Goose Chase
Speaking during a fireside chat at the WAIB Summit Monaco 2026, Kerstens expressed skepticism about the legal feasibility and actual necessity of regulating DeFi. He pointed out a fundamental mismatch between traditional legal frameworks and decentralized software, noting that laws are designed to govern people and corporate organizations, not autonomous computer networks. To regulate a true non-entity, lawmakers would need to invent an entirely new legal doctrine.
Furthermore, Kerstens described DeFi as a leaderless “movement” rather than a structured business, questioning why regulators are so eager to intervene. In his view, the framework isn’t broken or outdated. He emphasized that if a sector doesn’t present an inherent, quantifiable problem, it shouldn’t be subjected to heavy-handed rules just for the sake of regulation.
The Centralization Debate and the Shift to Tokenization
However, not everyone in European governance shares this hands-off perspective on decentralized protocols. A working paper published by the European Central Bank (ECB) earlier this year directly challenged the idea that DeFi platforms are truly decentralized. Looking at data from top protocols like Uniswap, Aave, MakerDAO, and Ampleforth, the paper revealed that the top 100 governance token holders controlled more than 80% of the token supply. This concentration of voting power led the ECB authors to question whether these platforms should continue to enjoy exemptions from MiCA as “fully decentralized” services.
Despite the ECB’s concerns over governance concentration, Kerstens maintains that the EU’s regulatory energy is better spent elsewhere. Rather than chasing decentralized code and web networks, he believes the smarter path forward is to build a broader, forward-looking framework dedicated to tokenization and real-world assets. As the August consultation deadline approaches, the feedback from the global crypto sector will ultimately decide whether Europe decides to draft a “MiCA 2” for DeFi or pivots its focus toward the multi-trillion-dollar RWA market.
