Zinger Key Points
- Some regulators express concern over the speed of crypto license approvals across certain EU jurisdictions.
- Global regulators face pressure from political leaders to modernize outdated frameworks and adapt to crypto's rapid mainstream adoption.
- Historic Summer Setup: 3 "Power Patterns" Triggering in the next 75 Days - Get The Details Now
A senior executive at Franklin Templeton has raised alarm that the European Union may fall behind in the global digital asset race as the pace of crypto regulation across the continent remains sluggish.
Speaking at the DigiAssets 2025 event, Catriona Kellas, International Legal Lead for Digital Projects at Franklin Templeton, warned that Europe could become a mere corridor between the rapidly advancing crypto markets of the United States and Asia, Decrypt reported.
"Europe’s positioned well," she acknowledged, but emphasized that the region’s slower legislative process is a growing liability.
While once a pioneer in crypto regulation, the EU could find itself sidelined if it doesn't accelerate its response to the evolving landscape.
Kellas praised the momentum coming out of the U.S., calling it a driver of fresh urgency for European regulators. "There's a real danger," she said, "that delays in rulemaking allow more agile jurisdictions to leap ahead."
She noted that officials within the European Commission seem increasingly aware of this risk.
In a recent meeting, Kellas highlighted how the term "competition," rarely uttered in past EU regulatory discussions surfaced as a focal point.
Talks around a possible upgrade to the EU's existing Markets in Crypto Assets (MiCA) framework are already underway.
While Kellas described "MiCA 2" as not yet confirmed, she indicated that discussions around an update are gaining momentum.
Additionally, the EU's DLT pilot initiative, intended to provide a regulated environment for blockchain innovation, has been active for just a year, but Kellas said regulators are already working on improvements to ensure it remains effective and relevant.
Despite early concerns that MiCA 2 might introduce tighter restrictions, Kellas said optimism is growing.
The sense is that European lawmakers are beginning to learn from developments in the U.S. and Asia-Pacific, potentially tempering overly rigid approaches.
Recent developments reinforce the industry's growing appetite for a European footprint.
Both Coinbase COIN and Gemini are reportedly seeking licenses in Luxembourg and Malta, a move that would give them access across all 27 EU member states under the bloc's "passporting" regime.
However, that system has also triggered some anxiety among EU officials.
Certain regulators worry about how quickly some member states are granting crypto licenses, potentially exposing the wider bloc to risks.
Kellas also suggested that global regulatory attitudes are beginning to shift.
As digital assets become more integrated into the mainstream, it’s becoming harder for governments to revert to highly conservative postures.
"It's difficult to put the genie back in the bottle," she said.
Beyond the written rules, she emphasized that informal or “soft” regulatory attitudes, such as institutional hesitation or bureaucratic caution, can be just as impactful as formal law.
Increasingly, she said, regulators are being nudged by political leaders to move beyond traditional approaches and rethink their frameworks from the ground up.
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