#16 — Capital Markets Weekly Review

TL;DR: Brussels is already planning MiCA 2.0—the current crypto regulation will need revision by 2027. Tokenized assets keep spreading: HSBC brought tokenized deposits to the US, Legal & General put £50 billion of liquidity funds on-chain, and South Korea is piloting tokenized government bonds. The ECB wants competitiveness through harmonization, not deregulation, and called for finally completing the banking union. Stablecoins are being wired into institutional payment rails, though Fed research shows most still sit idle in crypto markets. The UK set its crypto regime timeline: consultation now, authorization gateway September 2026, full rules October 2027.

EU MiCA Regulation Evolution and Implementation

MiCA won't stay static. A European Commission adviser said at Paris Blockchain Week that the regulation will likely evolve into "MiCA 2" as crypto markets mature beyond the conditions regulators originally anticipated, according to Cointelegraph. The Commission plans to review MiCA and launch a public consultation by 30 June 2027 to assess whether current rules actually support market participants and business development, according to the European Commission. EU officials acknowledged that regulatory adjustments are likely as crypto businesses identify operational gaps and compliance challenges during implementation, Cointelegraph reported.

The European Central Bank supported a proposal to transfer crypto regulatory oversight from EU member states to the European Securities and Markets Authority, according to Cointelegraph. Several firms secured regulatory approvals under the framework: Confirmo obtained dual licensing in Ireland with Payment Institution authorization from the Central Bank of Ireland alongside its MiCA authorization granted in December 2025, ClearBank Europe became the first Dutch credit institution to complete MiCAR notification as a Crypto Asset Service Provider, and Banking Circle obtained its third European license—a CASP license in Luxembourg. The Central Bank of Ireland issued a Notice of Intention to amend the Minimum Competency Code 2017 to integrate crypto-asset knowledge and competence requirements for staff at Crypto-Asset Service Providers.

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Tokenization of Traditional Financial Assets

The European Central Bank published a bulletin outlining conditions for safely tokenizing Europe's capital markets: settlement must use central bank money, infrastructure must remain interoperable, and regulation must stay robust. The ECB acknowledged tokenization could improve efficiency in securities issuance and settlement while reducing costs, with early evidence showing tokenized bonds can lower borrowing costs.

HSBC extended its Tokenised Deposit Service to the US and completed a pilot simulating issuance, transfer and atomic settlement on the Canton Network, according to American Banker and Finextra. Legal & General Asset Management made its £50 billion liquidity funds available in tokenized form through Calastone's blockchain-based distribution network. UniCredit invested €4 million to acquire a 16 percent stake in BlockInvest. Ripple and Kyobo Life piloted tokenized government bond settlement in South Korea as the country builds rules for token securities and digital asset payments. South Korea announced plans to pilot tokenized deposits for government spending with preset spending limits, timing controls and category restrictions for public sector expense payments.

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European Banking Union and Capital Markets Integration

The ECB's Governing Council warned the EU Commission that competitiveness should come from regulatory harmonization and integration, not deregulation, according to EUNews. The real question is whether member states will finally agree on the European deposit insurance scheme—a stalled initiative for over a decade that's critical to completing the banking union. The ECB is advocating for deeper European capital markets integration through a Savings and Investments Union, arguing that current banking regulations already meet international standards and haven't hindered lending.

The European Payments Initiative, Bancomat, and SIBS-MB WAY announced the successful completion of a joint proof of concept demonstrating interoperability of their mobile payment solutions for cross-border transactions in physical retail. EuroCTP, the European initiative delivering the EU's first real-time pre- and post-trade Consolidated Tape for shares and ETFs, selected Exegy as its core technology partner.

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Stablecoin Infrastructure and Payment Integration

Visa launched a validator node on the Tempo blockchain, taking a direct role in transaction validation as it expands infrastructure for stablecoin settlement, according to Cointelegraph. The payments network also expanded work with blockchain firms OwlTing and Tempo, increasing its reach into agentic commerce and stablecoins. Societe Generale's digital asset unit SG-Forge partnered with Consensys to expand global access to its USD CoinVertible stablecoin through integration with the MetaMask Web3 wallet.

Federal Reserve research showed the vast majority of stablecoins are either sitting idle or circulating within crypto markets instead of being used to pay for goods and services, according to PYMNTS. That means the infrastructure is being built, but actual payment adoption hasn't followed yet. Broadridge rolled out a crypto and tokenized asset platform for Canadian wealth managers, addressing challenges integrating digital assets without relying on separate systems.

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UK and National Crypto Regulatory Frameworks

The UK Financial Conduct Authority launched a consultation on guidance for crypto rules covering stablecoins, trading and staking ahead of a broader UK crypto regime expected to take effect in October 2027, according to Cointelegraph. The FCA authorization gateway is scheduled to open in September 2026. Winston & Strawn counsel Konstantinos Adamos, formerly head of legal for cryptoassets at Revolut, discussed the UK regulatory timeline in an IFLR article.

The US Federal Reserve consulted on a proposal that would enable participants in its FedNow real-time payments system to make cross-border transfers, according to Finextra.

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Co-authored by Claude. Curated and edited by Konstantin Werhahn.