Regulating Decentralised Finance under the MiCAR Framework

This poster presents one component of a broader PhD research project examining how decentralised finance (DeFi) interacts with the European Union’s evolving financial regulatory framework. The dissertation investigates the challenges DeFi poses to the Markets in Crypto-Assets Regulation (MiCAR) and explores how existing EU financial law can adapt to decentralised systems that operate without intermediaries. The research proceeds from two main objectives:(1) to develop a method to distinguish between partially and fully decentralised DeFi arrangements under MiCAR, and(2) to identify and evaluate how regulatory strategies aimed at investor protection can apply in the absence of intermediaries. This poster focuses on the first objective. It puts forward three cumulative criteria for determining full decentralisation — architectural, political, and custody — and refines the latter two using IT governance theory and the UNIDROIT Principles on Digital Assets and Private Law. These frameworks translate decentralisation from a technical or ideological notion into a legally assessable condition, clarifying how governance structures and asset control determine regulatory relevance. By developing legally grounded criteria for decentralisation, this part of the PhD lays the foundation for a subsequent legal test and conceptual definition capable of identifying when DeFi arrangements fall within MiCAR’s regulatory scope.