Franklin Templeton’s Catriona Kellas said that the EU is lagging in crypto as updates to the Markets in Crypto Assets (MiCA) regulation and discussions around MiCA 2 are still in preliminary stages.
As crypto adoption increases globally, regulators in the EU are facing pressure from governments to adopt more flexible and forward-thinking frameworks.

The European Union may lose its competitiveness in the crypto industry owing to regulatory stagnation. Catriona Kellas, International Legal Lead of Digital Projects at Franklin Templeton, believes that more agile markets in the United States and Asia could leave Europe behind.

Franklin Templeton Exec Comments On EU’s Crypto Regulation

During the DigiAssets 2025 Conference, Kellas expressed concerns over the EU’s lagging legislative momentum. Even as she agrees that Europe is in control with its apparent strength, she also noted some anxiety in the sector that the region was a potential afterthought in the international development of crypto. 

“There is a real risk with this technology that jurisdictions which were perhaps at the very forefront a few years ago… it’s so easy to fall behind,” she said. Conversely, Kellas referred to the vibrant rate of innovation in the U.S., characterizing the transatlantic process as an invigorating factor on the regulatory debates in Europe. 

She added that the American market has been showing interest in Brussels ‘ competitiveness, a topic that was not very common in its discussions before. Kellas referenced a shift in tone from the European Commission, recalling a recent session where officials invoked the term “competition” for the first time in her experience.

According to Franklin Templeton’s Kellas, this move indicates an increased awareness in Brussels that regulatory structures need to change at a faster pace to keep up with the digital assets environment. One of the tools that the EU has already introduced is its distributed ledger technology (DLT) pilot regime.

It refers to a regulatory sandbox that is supposed to give crypto firms an opportunity to run in a highly controlled environment. Since its introduction a year ago, the program is said to be receiving updates to make it viable amid the market changes.

Kellas’ Take On MiCA 2

The central regulation measure of the EU concerns the Markets in Crypto Assets (MiCA) regulation, which was developed in June 2023. There is already more talk among industry watchers of a second version, MiCA 2, and there is some indication that consultations are already well advanced. Kellas observed that updates are to be expected, but carefully qualified them by stating that they are still only possibly coming.

In the meantime, crypto trading venues like Coinbase and Gemini are getting licenses to operate in EU countries such as Luxembourg and Malta. These licenses, once granted, could allow them to expand across all 27 member states under the EU’s “passporting” system. Nevertheless, this accelerator mode has also attracted the attention of the regulators, who are worried about disproportionate regulation in various jurisdictions.

Franklin Templeton’s Kellas also brought up the new relationship between governments and digital assets. With the increased adoption of cryptos in every part of the globe, she added, regulators are increasingly feeling the pressure to accommodate more progressive, accommodating frameworks enforced on them by their political superiors. “Regulators [are]being challenged by their governments… not just think within the box that they’ve always been presented with,” she said.

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Filed under: Bitcoin - @ June 17, 2025 7:26 pm