Why is Malta proposing new rules for decentralised finance?

Malta is proposing a legal framework for decentralised finance to clarify how blockchain-based financial services should be regulated under the European Union’s Markets in Crypto-Assets framework. The regulator said some DeFi projects retain centralised features that may require regulatory oversight.

What are software-based organisations under Malta’s proposal?

Malta's proposal would create a legal category for software-based organisations that includes decentralised autonomous organisations and other software-governed entities. The framework would distinguish the organisation itself from the protocol or software it operates.

How does MiCA affect decentralised finance projects in Malta?

Under MiCA, fully decentralised projects may fall outside the regulation's scope if they operate without intermediaries or central control. Malta's regulator said many DeFi projects may not meet that standard because governance and control can remain concentrated.

What is the timeline for Malta’s DeFi consultation?

Malta's Financial Services Authority opened the consultation on June 12 and is accepting industry feedback until July 10. The regulator will review responses before deciding whether to introduce a formal framework.

How does Malta’s proposal fit into wider European crypto regulation?

Malta's proposal aligns with broader European efforts to assess decentralised finance under MiCA. Recent reviews by the European Central Bank and European Commission have examined whether governance concentration and regulatory gaps could require additional oversight of DeFi projects.

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Malta seeks DeFi rules under MiCA

Written by Mahathir BayenaPublished Jun 19, 2026, 1:30 AM

Malta has launched a consultation on a legal framework for decentralised finance and software-governed organisations.
The proposal would create a new category covering decentralised autonomous organisations and other software-based entities.
The initiative reflects growing European scrutiny of DeFi projects operating under the MiCA regulatory framework.

Malta’s financial regulator has opened a public consultation on a proposed legal framework for decentralised finance that would recognise decentralised autonomous organisations as part of a broader category of software-based organisations.

The consultation, launched by the Malta Financial Services Authority on June 12, seeks industry feedback through July 10 and examines how DeFi projects should be treated under the European Union’s Markets in Crypto-Assets regulation.

“MiCA excludes fully decentralised models from its regulatory scope, meaning that projects without intermediaries or central control may not need to comply with MiCA,” said the Malta Financial Services Authority in its discussion paper.

The regulator proposed separating the legal treatment of software-governed organisations from the rules applying to the underlying protocols and software, arguing that many DeFi projects retain elements of centralised control.

The MFSA said the framework is intended to address regulatory accountability within blockchain-based financial services, and following the consultation the regulator will review industry submissions before determining next steps.

Malta introduced one of Europe’s earliest comprehensive crypto regulatory frameworks in 2018 and has remained an active participant in digital asset policymaking across the European Union.

The consultation follows broader European discussions around DeFi regulation, including a European Central Bank review that found governance within several major DeFi protocols remains concentrated and a European Commission review examining whether additional MiCA rules may be required.