The European Union is set to begin developing a regulatory framework for decentralized finance (DeFi) in 2026, according to EU crypto policy experts. This move follows the implementation of the Markets in Crypto-Assets Regulation (MiCA) on December 30, 2024, which lacks a clear definition of decentralization, leaving DeFi protocols in a regulatory gray area. Vyara Savova, head of policy at the European Crypto Initiative, noted that while MiCA theoretically excludes fully decentralized protocols from regulation, the criteria for such exclusions remain undefined. The EU aims to establish a legal definition of decentralization by mid-2026, as part of its broader efforts to revise regulations in specific areas, including stablecoins. This initiative reflects the EU's commitment to addressing the regulatory challenges posed by the rapidly evolving DeFi sector.