EBA Calls for Crypto Lending and DeFi Access to Be Addressed Under MiCA

European Banking Authority calls for crypto lending and access to DeFi lending protocols

The European Banking Authority (EBA) has called for crypto-asset lending to be considered within the European Union’s Markets in Crypto-Assets Regulation (MiCA), including activities in which crypto-asset service providers facilitate access to decentralized finance lending protocols.

The recommendation was included in the EBA’s response to the European Commission’s targeted consultation on the review of MiCA, published on September 24. The authority said the review should address regulatory gaps created by the emergence of new crypto-asset products and business models.

CoinMarketCap highlighted the recommendation in a post on X, describing the EBA’s position as part of the EU’s ongoing review of the crypto regulatory framework.

EBA Seeks Rules for Crypto Lending

The EBA said the European Commission should conduct a robust cost-benefit analysis on potential legislative changes that would expand MiCA to cover crypto-asset borrowing and lending activities.

The authority specifically identified the possibility of adding the intermediation of borrowing and lending to the list of crypto-asset services covered by MiCA. It also recommended considering requirements for crypto-asset service providers that facilitate client access to decentralized lending protocols.

The EBA cited several risks associated with crypto lending, including insufficient information about fees, interest rates or yields, changes to collateral requirements, and the rights and liabilities of users.

It also pointed to risks associated with leverage, collateral chains, inadequate creditworthiness assessments, commingling of crypto-assets and potential losses resulting from fraud, scams, operational failures and hacks.

DeFi Access Included in Proposed Review

The EBA’s recommendation extends beyond conventional crypto lending platforms to situations where regulated crypto-asset service providers provide customers with access to DeFi lending protocols.

Under the framework proposed for consideration, providers facilitating such access could face additional disclosure obligations warning users about the risks associated with DeFi lending. The EBA also noted that truly decentralized protocols are unregulated and therefore do not provide the same safeguards that apply to regulated financial services.

Other measures identified by the EBA for consideration include suitability assessments, leverage limits and more detailed disclosures. The authority also raised the possibility of a certification regime for DeFi lending protocols, including assessments of their resilience to cyberattacks.

MiCA Review Broadens Regulatory Focus

The EBA’s latest recommendation follows earlier joint work with the European Securities and Markets Authority (ESMA) examining DeFi, crypto lending, borrowing and staking.

In a January 2025 report, the two authorities said crypto lending and borrowing presented risks including excessive leverage, information asymmetries, money-laundering and terrorist-financing exposure, and interconnectedness arising from collateral chains and rehypothecation. At that time, they said they had not identified current financial-stability risks from the activities.

MiCA entered into application on December 30, 2024, while rules covering asset-referenced tokens and e-money tokens began applying on June 30, 2024. The EBA said its September 2026 response is intended to support the European Commission’s review of the regulation.

The EBA’s recommendations will now form part of the broader regulatory review, with the authority saying it remains ready to support any cost-benefit analysis considered appropriate by the European Commission.

Writer: Victoria Hale
Technology & Blockchain Writer

Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.

She prioritises clarity and accuracy when explaining technical developments to a general audience.