European Banking Authority Recommends Including Crypto Lending in MiCA Regulation

The European Banking Authority (EBA) has stated that the EU should incorporate cryptocurrency lending activities into the framework of the Markets in Crypto-Assets Regulation (MiCA), with the regulatory scope covering cryptocurrency service providers assisting customers in accessing decentralized finance (DeFi) lending protocols. The EBA recommends that the European Commission (EC) conduct a cost-benefit analysis and consider adding compliance requirements and regulatory activities for intermediary crypto lending services, setting additional requirements for crypto companies providing access to DeFi lending protocols. Potential measures include user suitability testing, leverage limits, and additional disclosure requirements. The EBA also proposed that lending involving asset reference tokens or electronic money tokens requiring MiCA authorization should be restricted, and a certification system should be established for DeFi lending protocols. The EBA pointed out that crypto lending has been conducted in at least 16 EU member states, and the involvement of crypto companies and AI tools is increasingly blurring the lines between centralized finance and decentralized finance. These recommendations are part of the MiCA review opinions, which also cover stablecoin rules, cryptocurrency asset classification, and reporting requirements.

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