Wrong Turns or Paths Not (Yet) Taken: The Creation of an EU Regulatory Framework for Digital Finance

This article aims to take stock of the progress made through recent EU legislative
initiatives on digital finance, specifically by discerning how the EU has pursued
certain options for regulation but has seemingly shirked from addressing some
emergent issues. The article describes the influence of the guiding principle of
‘same activity, same risks, same rules’ in the EU’s legislative approach towards
digital finance. This article focuses on the Markets in Crypto Assets Regulation
(MiCAR) and the Digital Operational Resilience Act (DORA) as the key
instances of the EU’s legislative efforts to categorise differing ‘risks’.

By reference to MiCAR and to DORA, the article highlights the contradiction
at the essence of the ‘same activity, same risks, same rules’ outlook. The article
evaluates the potency of MiCAR and DORA in enforcing against activities
which are characterised by their elusively shapeshifting traits. The article reflects
on the supposedly future-proof qualities of the new EU framework on digital
finance by briefly pinpointing some examples of how the legislation remains
exposed to changing innovations, which may eventually prompt further reforms
to MiCAR and DORA.