Brussels Weighs a Dedicated EU Rulebook for Crypto Staking

The European Commission has opened a formal question that could reshape how staking works across the bloc: whether Europe’s existing crypto-asset rules go far enough to cover the business of staking-as-a-service, or whether a new, dedicated regulatory layer is needed. The question, tucked into item 66 on page 36 of the Commission’s ongoing Markets in Crypto-Assets (MiCA) review consultation, is open for public comment until Sept. 30, 2026, at 23:59 CEST — but its eventual answer could determine who is allowed to run staking operations in the EU, and at what cost.

Staking is the process by which holders of proof-of-stake cryptocurrencies like Ethereum lock up coins to help validate transactions and secure the network, earning rewards in return. Because running a validator directly requires technical infrastructure and, in Ethereum’s case, a minimum of 32 ETH, most retail users instead rely on staking-as-a-service providers or liquid staking protocols that pool smaller deposits together. According to a joint report from the European Banking Authority and the European Securities and Markets Authority referenced in the consultation, liquid staking alone was worth an estimated $44 billion as of October 2024. Nearly 80% of that activity took place on Ethereum, and a single protocol, Lido, accounted for roughly $25 billion of it — a concentration that regulators appear increasingly uneasy about ignoring.

What MiCA Currently Does and Doesn’t Cover

MiCA already draws a line that matters here. Under existing rules and ESMA guidance, a firm that takes custody of a customer’s crypto and stakes it on the customer’s behalf is treated as performing custody and administration — a regulated activity under MiCA Articles 70 and 75, which impose safeguarding, record-keeping and asset-return obligations. That same guidance also prohibits crypto-asset service providers from staking customer holdings for their own proprietary benefit. What MiCA does not currently touch is proprietary or direct staking, where an individual stakes their own coins without going through an intermediary — that activity sits outside the authorization regime entirely.

The review now asks whether this custody-based framework is the right tool for a market that has grown well beyond what it was designed for. The Commission is also examining a related and thornier question: where decentralized protocols with concentrated governance or administrative keys fit within MiCA’s scope at all, given that many staking pools are structured as decentralized autonomous organizations rather than conventional companies. This regulatory ambiguity around decentralized structures echoes tensions seen elsewhere in EU crypto policy, including debates over how much discretion national regulators should have — a dynamic visible in reporting on the European Central Bank’s reported influence over licensing decisions.

What a New Staking Regime Could Mean

No draft staking license, capital requirement or supervisory structure has been proposed. The consultation document is explicit that it represents an open question, not a final policy position. But the direction of travel matters for anyone using or building on proof-of-stake networks in Europe. A dedicated staking regime layered on top of existing custody rules would likely raise compliance costs for staking providers — costs that tend to be passed on to users through lower net rewards, or that push smaller and mid-sized validators out of the EU market altogether.

That outcome would carry consequences beyond compliance departments. If smaller staking operators exit or consolidate, validator delegation could concentrate further among a handful of large, licensed custodians — the opposite of the decentralization that proof-of-stake networks were designed to encourage. Given that Ethereum already sees nearly 80% of its liquid staking concentrated in a market where one protocol holds roughly $25 billion, additional regulatory barriers to entry could accelerate rather than reverse that concentration, with implications for network security and censorship resistance that go well beyond Europe’s borders.

What to Watch

The consultation period stretches well over a year, giving industry participants, node operators and consumer groups ample time to weigh in before any legislative text takes shape. Key things to track include whether the Commission ultimately proposes a standalone staking authorization category distinct from custody, how it chooses to treat decentralized protocols with governance concentration, and whether large liquid staking providers like Lido push for rules that formalize their existing market position rather than disrupt it. The outcome will sit alongside a broader pattern of European and American regulators filling gaps piecemeal in the absence of comprehensive crypto legislation, a dynamic also visible in how U.S. agencies have been improvising crypto rules without a unifying statute. For now, staking in the EU continues under the current custody-based framework, but the scale of the market — tens of billions of dollars concentrated in a handful of providers — makes it increasingly unlikely that regulators will leave the status quo untouched.

Source: CryptoSlate

This content is for informational purposes only and does not constitute financial or investment advice.