The European Banking Authority (EBA) has officially proposed integrating crypto lending activities into the existing Markets in Crypto-Assets (MiCA) regulatory framework. This recommendation was submitted as part of the European Commission’s ongoing review of the current crypto-asset legislation.
The regulator suggests that crypto borrowing and lending services, including those where providers facilitate access to decentralized finance (DeFi) protocols, should fall under formal oversight. The EBA advises the European Commission to perform a comprehensive cost-benefit analysis regarding these potential legislative updates.
Proposed measures include implementing user suitability tests, establishing leverage limits, and introducing stricter disclosure requirements for firms. The EBA also explored the possibility of restricting lending involving specific asset-referenced or e-money tokens that already require MiCA authorization.
Furthermore, the authority proposed a certification regime for DeFi lending protocols. The EBA noted that crypto lending is expanding across the European Union, with borrowing and lending activities currently identified in at least 16 member states.
The regulator highlighted that the integration of artificial intelligence tools and easier access to DeFi through crypto firms is increasingly blurring the lines between centralized and decentralized finance. These recommendations are part of the EBA’s broader input on MiCA, which also covers stablecoin rules and asset classification.
