The European Banking Authority (EBA) has called for crypto lending to be brought under the MiCA framework and for rules to be extended to companies providing clients with access to DeFi protocols. The regulator recommends that the European Commission conduct a cost-benefit analysis for potentially adding intermediation in borrowing and lending to the list of MiCA services, noting activity in at least 16 EU countries.

Proposed requirements: suitability tests, leverage limits, disclosure

The EBA outlined possible regulatory measures, including conducting suitability tests for users, setting limits on leverage, and imposing additional disclosure requirements. Requirements are also proposed for crypto companies that provide clients with access to DeFi lending.

Restrictions for ART/EMT loans and DeFi protocol certification

Options under consideration include restricting access to lending operations involving asset-referenced tokens and electronic money tokens, which are subject to MiCA authorization. The EBA also raised the possibility of introducing a certification regime for DeFi lending protocols.

Growth of crypto lending and blurring of CeFi and DeFi boundaries

According to the EBA, crypto lending is gaining momentum across the bloc, with borrowing and lending operations previously recorded in at least 16 EU member states. Easier access to DeFi through crypto companies and artificial intelligence tools is increasingly blurring the line between centralized and decentralized services.

EBA recommendations as part of MiCA review

The lending proposals are part of the EBA's broader contribution to the MiCA review, which also covers rules for stablecoins, crypto asset classification, and reporting requirements.