Overview
- The European Banking Authority formally sent recommendations to the European Commission on Sept. 24–25 that crypto borrowing and lending, including services that give customers access to DeFi lending protocols, should be considered for regulation under MiCA.
- The EBA outlined specific safeguards for intermediated lending such as suitability tests for users, limits on leverage, clearer fee and yield disclosures, protocol certification for cyber resilience, and possible bans on intermediating loans that use unauthorized asset‑referenced or e‑money tokens.
- The authority asked for stronger rules for multi‑issuer and third‑country stablecoin schemes and a review of minimum reserve or deposit requirements to curb regulatory arbitrage where stablecoins earn yields through DeFi.
- Market firms disagree on how to classify on‑chain vaults and intermediated interfaces, a dispute that will affect which products fall inside MiCA and how firms redesign apps, custody, and product offerings to meet any new rules.
- The Commission’s targeted MiCA review consultation closes on Sept. 30 and any binding change would require the Commission to publish a legislative proposal and the EU to adopt amendments, so the EBA’s recommendations do not yet change the law; MiCA entered application in December 2024 and originally left lending and many DeFi activities outside its scope.