EU CryptoReg Roundup: May 2026

This update is brought to you by our Regulatory & Risk Advisory practice group in Ireland. 

Our aim is to keep you informed of the fast-evolving legal landscape, from new legislation and guidance to significant case law and observations. Sign up here to receive the next update in your inbox.

The "key dates" section highlights key legislative and reporting dates relevant to Irish CASPs. 

Key developments this month include:

• European Commission targeted review of MiCAR.
• New MiCAR and TFR Q&As.
• AMLA 2025 Roadshow Report.
• ESMA's Quantum Computing TRV Risk Analysis.

Legislation and guidance

Europe

European Commission consultations on MiCAR review

20 May 2026 – The European Commission consults on the review of MiCAR.

• With this consultation, the European Commission aims to:
  
  
  • Seek to respond / inform the requests for reports on the application of MiCAR and on the latest developments in crypto-assets (as required under Article 140 and 142 of MiCAR) and consulting also the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) to that effect.
  • Seek to collect the views of the stakeholders on all the market developments not originally covered by MiCAR and whether policy or regulatory action would be warranted.
  • Seek to consult on matters that have emerged from the implementation of MiCAR to date.
  • Take stock of whether MiCAR is fit for the future in the rapidly evolving landscape of digital and tokenised asset markets in a global and internationally competitive context, seizing both the opportunities tokenisation and DLT bring and addressing risks they may generate.
  • In line with its simplification agenda to support EU competitiveness, the European Commission also seeks to assess whether administrative or other burdens emanating from MiCAR and its implementation measures can be simplified, reduced or dispensed with.

• With regards to certain policy areas, the European Commission is seeking responses on the regulatory framework for prediction markets and perpetual futures, particularly under MiFID and MiCAR. On the topic of tokenisation, the consultation is seeking feedback on the legal certainty of native and non-native tokens.
• Separately, the European Commission seeks feedback from EU citizens at large on the general level of their awareness, experience and views in relation to different types of digital assets and associated services they may be using.
• Responses for both consultations need to be submitted by 31 August 2026.

MiCAR and TFR Q&As 

8 - 22 May 2026 – European Commission responses to Q&As under MiCAR.

• Q&A 2024_7168 – Passporting procedure for credit institutions (CIs) and e-money institutions (EMIs) issuing tokens under MiCAR.
  
  • As MiCAR does not create a specific passporting procedure for CIs and EMIs issuing tokens, MiCAR Articles 146 (for CIs) and 48(3) (for EMIs) are to be interpreted as submitting CIs and EMIs issuing asset-referenced tokens (ARTs) and e-money tokens (EMTs) on a cross-border basis to comply with the existing passporting framework set for these categories of establishments, namely for CIs under CRD and EMIs under EMD2.
    
    
• Q&A 2024_7166 – Publication of white papers.
  
  • This Q&A confirmed that Article 28 of MiCAR on the publication of white papers of ART issuers on their website also applies to issuers exempted from authorisation under Article 16(2) of MiCAR.
  • Therefore, ART issuers which can avail of an exemption from authorisation pursuant to Article 16(2) MiCAR must draw up, notify, and publish the whitepaper.
    
    
• Q&A 2024_7084 – Qualification of crypto-asset service in case of exchange of EMTs for other crypto-assets.
  
  • This Q&A queries whether the service consisting in exchanging EMTs for other crypto-assets be qualified as exchange of crypto-assets for crypto assets or as exchange of funds for crypto assets, due to the dual nature of EMTs as crypto-assets under MiCAR and deemed e-money (i.e. funds under PSD2). 
  • The response notes that although EMTs are to be deemed electronic money pursuant to Article 48(2) MiCAR, and therefore be considered funds, they are defined, in MiCAR, as a type of crypto-asset and should therefore be considered as such for the purpose of interpreting them within the scope of crypto-asset services governed by MiCAR.
    
    
• Q&A 2024_7078 – Issuers of EMTs and scope of application of AML requirements.
  
  • This Q&A queries the extent of an EMT issuers AML obligations, in particular, whether holders of EMTs should be considered as clients of the EMI within the meaning of AMLD5, so that the relevant KYC requirements apply on an ongoing basis in respect of holders of EMTs (not only at the time of issuing but also following trading on the secondary market).
  • European Commission response: "Yes, according to Article 48(2) MiCAR, EMTs can only be issued by EMIs or credit institutions. Since EMIs and credit institutions are obliged entities under Directive (EU) 2015/849 (AMLD4) as amended by Directive (EU) 2018/843 (AMLD5), it follows that they should comply with the customer due diligence rules prescribed for obliged entities under the Union AML/CFT framework. No exception can be found in MiCAR or Directive (EU) 2015/849 as amended with regard to AML/CFT obligations for issuers of EMTs."

22 May 2026 – European Commission response to Q&A under the Transfer of Funds Regulation (TFR).

• Q&A 2024_7172  - Lightning Network (LN) Transactions and whether they fall within the scope of the TFR and Travel Rule Guidelines.
  
  • The Q&A notes that the LN is a decentralised network using smart contract functionality in the blockchain to enable instant (micro)payments across a network of nodes.
  • The response notes that the TFR only applies when at least one crypto-asset service provider (CASP) is involved in the transfer of crypto-assets. The use of the LN does not require the intermediation of CASPs for allowing transactions, and as clarified in recital 22 MiCAR, crypto-asset services provided in a fully decentralised manner without any intermediary do not fall within the scope of MiCAR and TFR.
  • Therefore, the use of the LN in mere peer to peer transactions not operated by CASPs, does not fall within the scope of MiCAR (recital 22 MiCAR), nor that of the TFR.
  • However, CASPs offering their customers the possibility to transfer crypto-assets with the use of the LN fall within the scope of MiCAR and TFR and should therefore comply with the travel rule requirements.

12- 21 May 2026 - ESMA responses to Q&As under MiCAR.

• QA_2845  – Machine-readable (XBRL) format requirement for modified white papers.
  
  • A reporting entity (e.g. an issuer, offeror or person seeking admission to trading) is required to submit a modified white paper for crypto-assets under MiCAR in the XBRL format following the entry into application of Commission Implementing Regulation (EU) 2024/2984 (ITS) on 23 December 2025. 
  • ESMA also clarifies that the entry into application of the ITS does not constitute a ‘significant new factor’ which would trigger the notification of a modified whitepaper in circumstances where the original whitepaper was not notified in the XBRL format. 
    
    
• QA_2671 – Exemption from white paper requirements when offering a crypto-asset other than an ART or EMT.
  
  • Article 4(4) of MiCAR specifies that the exemptions from the whitepaper requirement for certain offer to the public do not apply when the offeror or a person acting on its behalf makes known its intention to seek admission to trading of Title II crypto-assets.
  • In light of the limited territorial scope of MiCAR, admission to trading is to be understood as an admission to trading on a trading platform operated by a CASP established in the EU. Therefore, in the case where the crypto-asset is offered in the EU but is only admitted to trading on a platform provided by a service provider established outside the EU, Article 4(4) does not apply. 
  • Additionally, listing crypto-assets on decentralised exchanges in the EU could amount to an offer to the public. Albeit, pursuant to Recital 22 MiCAR, crypto-asset services provided in a fully decentralised manner without any intermediary are not within scope of MiCAR. This is assessed on a case-by-case basis.
    

Other updates

Ireland

Speeches and communications

1 May 2026 – Gabriel Makhlouf, Governor of the Central Bank if Ireland (Central Bank), published a blog post on the meetings of the International Monetary Fund, including on digital financial innovation. 

• Mr Makhlouf noted that discussions covered the rapidly evolving landscape of stablecoins, tokenised deposits, central bank digital currencies and the implications for public policy outcomes, as well as the differing regulatory approaches and cross-border elements. 
  
• Mr Makhlouf noted the recent Central Bank Discussion paper on DLT & Tokenisation, reiterating the need to consider the issue from a consumer, investor, financial stability and macroeconomic perspective.

26 May 2026 – Central Bank Deputy Governor Vasileios Madouros delivered a speech on tokenised finance. 

• Mr Madouros discussed the rapid private and public uptake of tokenisation, while raising an important question as to the future configuration of DLT infrastructure.
• Mr Madouros noted that any ultimate configuration needs to ensure interoperability, prevent fragmentation and maintain strong and accountable governance of the core infrastructures supporting finance.
• Finally, Mr Madouros considered the response of the Central Bank to tokenisation in four dimensions: evolution of central bank money; acceptance of DLT-based assets as eligible collateral; a responsive approach to regulation, supervision and oversight; and a catalysing role to co-ordinate towards better outcomes from a public policy perspective. 
  

Europe

ECB Annual Report 2025

4 May 2026 – The European Central Bank (ECB) published its Annual Report for 2025 summarising the ECB's work in 2025, including the following topics:

• The ECB and the European Systemic Risk Board expressed concerns around stablecoins and notably issued a recommendation on third-country multi-issuer stablecoin schemes. 
• The ECB actively contributed to the regulatory response to crypto-assets activities in international fora, including through its involvement in the Thematic Review of Global Regulatory Framework for Crypto-asset Activities conducted by the Financial Stability Board.
• The ECB operationalised its new responsibilities under MiCAR and finalised the joint 2025 report on payment fraud.
• Advancing the digital euro project and fostering the development of a European digital asset ecosystem. 

ECB digital euro updates

8 May 2026 – The ECB updated its FAQs on the digital euro pilot. 

• Question 6 confirms that the contracting national central bank may, at its discretion, extend the duration of the pilot by up to six months. 
• Question 74 confirms the discretionary usage of the European Digital Identify Wallet in support of the pilot for customer authentication.

AMLA 2025 EU-wide Roadshow Report

11 May 2026 – The Anti-Money Laundering Authority (AMLA) published its findings on the first systematic engagement with supervisors, financial intelligence units and private sector representatives across all 27 EU Member States.

• Regarding crypto-assets and related services, money laundering and terrorist financing risks were raised.
• Stakeholders pointed to structural vulnerabilities associated with the limited transparency around counterparties and beneficial ownership, the cross-border nature and speed of crypto-asset transfers, resource constraints and reliance on specialist blockchain analytics.
• The report acknowledged that the crypto sector is high-risk and that stakeholders expected AMLA to lead on harmonised CASP supervision standards, crypto-related typologies and vulnerabilities, and strengthened EU-based analytical capabilities and common infrastructure.
• The report notes that the non-financial sector was generally perceived as having comparatively lower direct exposure to crypto assets and crypto-related risks, although this may vary by Member State.

ESMA Quantum Computing Report

13 May 2026 – ESMA published a TRV Risk Analysis on quantum computing in financial markets.

• The article noted the significant challenge quantum computing poses for cybersecurity, specifically in how it could compromise the cryptographic protocols currently used.
• Regarding DLTs, their dependence on digital signatures, public-key cryptography, zero-knowledge proofs and hash functions, make them vulnerable to sufficiently powerful quantum computers.
• The article further notes that at the same time, integrating quantum-enabled blockchains with existing classical systems poses significant challenges, particularly with respect to secure communication and seamless data exchange between quantum and classical systems.

Speeches

4 May 2026 – Pierre Cipollone, Member of the Executive Board of the ECB, delivered a speech at the "Digital Assets and Monetary Policy Transmission" workshop, in which he praised the transformative potential of tokenisation and DLT.

• Mr Cipollone outlined how a central bank could utilise tokenisation to preserve monetary policy effectiveness, financial stability and monetary sovereignty. 
• Mr Cipollone noted the trade-offs between a single shared DLT network and multiple interconnected networks, concluding that early design choices should include common standards to avoid fragmentation and enhance competition.  
• Mr Cipollone considered two key contributions of the central bank: first relating to its role as issuer of central bank money and provider of liquidity against collateral; and second relating to its role as a catalyst in the market.
• Mr Cipollone concluded that central bank money can support innovation and provide a monetary system built on fundamentals, preserving the balance between public and private money.

8 May 2026 – Christine Lagarde, President of the ECB, delivered a speech titled "Stablecoins and the future of money: separating functions from instruments"'

• The speech discussed the growth of stablecoins being predominantly denominated in US Dollars. 
  
• The speech noted that the growing argument is that Europe must match the US model to remain competitive. 
• Christine Lagarde identified two distinct functions of stablecoins: a monetary function and a technological function. For the monetary function, the foundations have to come first: deeper and more integrated capital markets, and a safe asset. For the settlement function, the key question is less about which private instrument will prevail – be it stablecoins, tokenised deposits or a yet-to-emerge alternative – and more about whether a common anchor is in place. That’s why the ECB is placing central bank money at the heart of this new infrastructure.