The 86th Question

I — The Record

On 27 August I submitted a response to the European Commission's targeted consultation on the review of MiCA. Eighty-six questions, open since 20 May. It is my second contribution to this framework. The first went in on 13 March 2020, before MiCA existed, and argued that the CSDR could not carry DLT settlement, that Liechtenstein's TVTG was the model for token property law, and that global stablecoins would erode monetary sovereignty. Six years later, each of those positions has been confirmed — by the market, or by the Commission's own consultation document. That record is the basis for being direct now.

The consultation deserves to be welcomed, and not as a courtesy. It asks the property-law question directly — five ownership models, conflicts of law, the legal effect of a ledger entry — which is the question the 2020 contribution argued had to be asked, and which MiCA left untouched. A framework aiming at uniform ownership rights for tokens across the single market is aiming at the right target. What follows is direct because the target is right and the window is short, not because the effort is misconceived.

The full response is on the record. This is the short version: the positions, and the questions that interested me more than their answers.

II — Five Positions

The boundary question is the wrong question. Whether a token falls under MiCA or MiFID II depends on the definition of a transferable security — which, by ESMA's own account, is not uniformly transposed. Sixteen national authorities read it as written; twelve read it more broadly or more narrowly. The same token is a financial instrument on one side of a border and a crypto-asset on the other. Twenty years of harmonisation attempts have not fixed the definition, and MiDA should not be built on it. The way out is to stop regulating the asset and start regulating the service. Custody is custody whether the underlying is a utility token or a tokenised bond. The obligation flows from what the provider does to the client, not from what the asset is called in national law.

The interest prohibition funded Tether. It was designed to protect euro monetary sovereignty by preventing stablecoins from becoming deposit substitutes. What it produced instead: zero asset-referenced tokens licensed in two years, euro stablecoins that cannot compete on yield, and a structural subsidy to the one issuer the rule cannot reach — an estimated $13 billion of 2024 profit from Treasury interest, none of it flowing to holders, precisely because the dollar carries no equivalent prohibition. The fix is calibrated, not blanket: lift it for euro EMTs above EUR 500 million in circulation, capped at the ECB deposit facility rate minus 50 basis points. Below the threshold, nothing changes. Above it, the instrument the EU market needs becomes viable.

Decentralisation is not the threshold. Liability capacity is. The consultation asks how decentralised a protocol must be for regulation to let go of it. That is the wrong criterion. The right question is whether there are assets a court can reach. Admiralty law has treated ships as defendants for centuries — liability attaching to an addressable asset rather than a legal person is not alien to law. A DAO treasury locked as a liability reserve, or an on-chain insurance pool, satisfies the requirement. A certification badge does not.

Liechtenstein already built the property law regime. Token as container for rights, ledger entry with full third-party effect. Six years of live operation in an EEA member state. The regulation is 40 pages. The claim that an EU-level regime for token property law is technically impossible is directly contradicted by a jurisdiction that has done it. The obstacle is political will, and a 28th regime — operating alongside national property law rather than replacing it — is the instrument that does not require winning 27 political fights first.

The question nobody asked: the ghost shareholder. Squeezeout law assumes minority holders who can be served notice and paid. Tokenised equity creates a position these procedures cannot reach — keys lost, holder deceased without documentation, wallet destroyed. A majority acquirer at 98% is blocked by a position held by nobody, indefinitely, with no remedy in any member state's company law. The response proposes a dormancy-triggered compulsory acquisition with consideration in permanent escrow. Its absence from the consultation's 85 questions is the single most consequential gap in the document.

III — The 86th

And then the 86th — the open question, which is where the architecture argument had to go, because none of the preceding 85 asks it. DTCC began production trades of tokenised securities on the Canton Network in July, with full platform launch in October — BlackRock and JPMorgan among more than fifty participating firms, and Euroclear co-chairing the governance. Deutsche Boerse's D7 is live. The interoperability standards for tokenised settlement are being written now, without a public institution at the table. The ECB's Appia is the sovereign alternative — and it will not win a product race against an exchange operator, which is fine, because that is not its job. The GSM standard did not compete with Nokia. It set the terms Nokia had to meet. MiDA should designate Appia as the reference infrastructure and make connection to the sovereign layer the condition for the framework's advantages. If Appia is delayed, the fallback belongs in primary law: any DLT infrastructure operating in the EU market connects to Eurosystem settlement and publishes open APIs. The ECB does not need to run the infrastructure. It needs to ensure nobody else can capture it.

The CMU failed because integration was attempted after national interests had calcified around existing infrastructure. MiDA arrives before that has happened to digital asset markets. There are no 32 digital asset CSDs yet, no incumbents defending switching costs. The consultation's questions were about calibration. The answer that matters is about architecture — and the window for giving it is open now, not indefinitely.