Europe's journey toward comprehensive digital asset regulation represents one of the most significant regulatory transformations in modern financial law. From the wild west of Initial Coin Offerings to today's sophisticated Markets in Crypto-Assets (MiCA) framework, the continent has navigated unprecedented challenges in balancing innovation with investor protection and market stability.

In this comprehensive Q&A, Thibault Verbiest, Founder of DALAW and a seasoned senior legal expert with over 30 years of experience in shaping the digital landscape through law, shares his unique perspective on Europe's regulatory evolution. His expertise spans across pivotal areas such as internet regulation, artificial intelligence (AI), electronic payments (e-payments), financial technology (fintech), cryptocurrency finance (cryptofinance), digital banking, and Central Bank Digital Currencies (CBDC). As co-author of "Bitcoin and Blockchain," which was awarded the Turgot Prize for the best Financial Economics book, and having served as an expert witness at the Belgian Federal Parliament and French National Assembly hearings on digital asset regulations, Thibault brings unparalleled insight to the intersection of law and emerging technologies.

Thibault's responses explore three critical dimensions of Europe's digital transformation: the lessons learned from early crypto regulation and their application to emerging technologies like AI-blockchain integration and CBDCs, the complex convergence between traditional finance and decentralized financial protocols, and the evolving legal frameworks needed to govern the intersection of AI and blockchain technologies. His analysis reflects both the challenges regulators face in keeping pace with rapid technological advancement and the opportunities for creating more inclusive, efficient, and secure financial systems through thoughtful regulatory design.

Question 1: Evolution of European Crypto Regulation - From Early Days to MiCA

Having been active in crypto and blockchain law since the early days and co-authoring the first French book on blockchain, you've witnessed the complete evolution of European digital asset regulation. How do you assess the journey from the initial regulatory uncertainty to today's comprehensive MiCA framework? What lessons from the early ICO boom and subsequent regulatory responses should inform how we approach emerging technologies like AI-blockchain integration and Central Bank Digital Currencies (CBDCs)?

Having been involved since the early days, I see the European journey as a gradual but decisive shift from uncertainty to clarity. In the era of the ICO boom (2016–2018), we witnessed tremendous innovation, but also a lack of investor protection and frequent regulatory arbitrage. National regulators improvised, often inconsistently, which created fragmentation in the European market.

The Markets in Crypto-Assets Regulation (MiCA) is a major milestone: it provides legal certainty, harmonizes rules across the EU, and establishes a level playing field. The key lesson is that innovation must not outpace trust. The excesses of the ICO era taught us that without clear standards, innovation risks being discredited. Going forward, as we face new paradigms such as AI–blockchain integration and CBDCs, regulators should adopt the same principle: encourage experimentation, but within guardrails that ensure accountability, interoperability, and consumer trust.

Question 2: The Intersection of Traditional Finance and DeFi - Regulatory Convergence

With your extensive background in traditional financial services regulation, e-payments, and digital banking, combined with your blockchain expertise, how do you see the convergence between traditional finance and DeFi evolving? What regulatory frameworks are needed to bridge the gap between conventional banking supervision and decentralized financial protocols, particularly regarding consumer protection, systemic risk, and cross-border regulatory coordination?

We are entering a phase where traditional finance and DeFi are no longer separate worlds—they are converging. Institutions are experimenting with tokenized deposits, on-chain settlement, and blockchain-based market infrastructure. At the same time, DeFi protocols are maturing and attracting institutional interest.

The challenge for regulators is to create bridges, not walls. This means designing frameworks that preserve the efficiency and transparency of decentralized protocols while embedding safeguards familiar to traditional finance: capital adequacy, risk management, consumer protection, and AML/CFT compliance. Cross-border coordination will also be key: decentralized systems cannot be regulated through purely national frameworks.

Here, one promising avenue is the certification of smart contracts. Instead of trying to apply “hard law” directly to lines of code—which is both unrealistic and counterproductive—regulators could rely on trusted third parties or recognized authorities to audit and certify smart contracts before they go live. This approach would work like a “seal of trust,” reassuring users and regulators that the code is secure, transparent, and compliant, while still preserving the open and innovative nature of DeFi. Such soft law mechanisms are far better adapted to a decentralized ecosystem than rigid legislative transposition.

Question 3: AI, Blockchain, and the Future of Digital Legal Frameworks

Your expertise spans both AI regulation and blockchain law - two technologies that are increasingly intersecting. How should legal frameworks adapt to govern AI-powered smart contracts, automated trading systems, and blockchain-based AI applications? What are the key regulatory challenges when these technologies converge, particularly around liability, transparency, and algorithmic accountability in decentralized systems? How do you see this shaping the future of digital financial services regulation?

AI and blockchain are converging in ways that will profoundly challenge existing legal frameworks. When an AI system executes a smart contract or drives automated trading strategies on-chain, questions of liability and accountability become complex: who is responsible—the developer, the deployer, or the algorithm itself?

To address this, legal frameworks need to evolve around three pillars:

Liability clarity – defining responsibility across the lifecycle of AI–blockchain applications.
Transparency & auditability – ensuring algorithms that interact with financial systems can be monitored, audited, and explained.
Embedded compliance & certification – leveraging blockchain’s immutability and traceability not to legislate code directly, but to require that AI-powered smart contracts be certified against standards of security, fairness, and accountability before deployment.

This model of certification offers a pragmatic balance: it avoids stifling innovation with overly rigid hard law, while giving regulators and users the assurance that algorithms acting in decentralized systems respect minimum standards.

If done correctly, this convergence could make financial services more secure, efficient, and inclusive. But if neglected, it could generate systemic risks. The regulatory response must therefore be anticipatory, not reactive.

Want to contribute to our Q&A series? If you're a legal expert in the web3/AI space and would like to share your expertise by joining our Q&A series, please reach out to hi@databirdjournal.com