European Banking Authority: Crypto lending should be included in MiCA supervision and cover DeFi lending protocol access services

PANews reported on September 24 that, according to Cointelegraph, the European Banking Authority (EBA) stated that the EU should include crypto asset lending activities in the Crypto Asset Market Regulation (MiCA) framework, and the scope of supervision should also cover the situation where crypto asset service providers assist customers in accessing decentralized finance (DeFi) lending protocols.

The EBA recommends that the European Commission (EC) conduct a cost-benefit analysis on relevant legislative changes and consider adding compliance requirements and regulatory activities for intermediary crypto lending services, while setting additional requirements for crypto companies that provide access services 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 currency tokens that require 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 carried out in at least 16 member states of the European Union, and the involvement of crypto companies and AI tools is making the boundaries between centralized finance and decentralized finance increasingly blurred. The recommendations are part of MiCA’s review, which also covers stablecoin rules, crypto asset classification and reporting requirements.