The European Union is at risk of falling behind in the world of cryptocurrency regulation, with the pace of legislation lagging behind both the United States and Asia. This warning comes from Catriona Kellas, the International Legal Lead for Digital Projects at Franklin Templeton, who spoke at the DigiAssets 2025 conference.
Kellas highlighted the energy and innovation coming from the United States, which is setting a high bar for the industry. She expressed concerns that Europe could become a “flyover zone” for crypto if it continues to take a long time to implement new regulations.
The European Commission seems to be aware of these challenges, with Kellas noting a shift towards a more competitive mindset within the organization. There are discussions around potentially updating the Markets in Crypto Assets (MiCA) legislation with a new version, dubbed “MiCA 2.”
In addition to legislative updates, the EU has implemented a distributed ledger technology (DLT) pilot regime to provide a sandbox for crypto companies to operate under regulatory observation. This initiative aims to ensure that regulations are fit for purpose and conducive to innovation in the sector.
As the industry evolves, major players like Coinbase and Gemini are seeking operational licenses in EU member states, signaling a push for broader market access. However, concerns have been raised about the rapid approval of passporting licenses, which could limit individual states’ ability to regulate Crypto-Asset Service Providers (CASPs).
Looking ahead, Kellas anticipates a shift in regulatory attitudes towards digital assets globally. As institutional interest in cryptocurrencies grows, regulators and lawmakers may need to adapt to a more forward-thinking approach to regulation.
In conclusion, the regulatory landscape for cryptocurrencies is evolving rapidly, and it is crucial for the EU to keep pace with developments in the US and Asia. By fostering a competitive environment and embracing innovation, Europe can position itself as a leader in the crypto industry.
This article has been edited for clarity and coherence by Stacy Elliott.