Aave Founder Stani Kulechov Criticizes EU Push for Tighter Stablecoin and DeFi Rules

Aave founder Stani Kulechov discussing EU regulatory proposals affecting stablecoin yields and DeFi access under MiCA.

Aave founder Stani Kulechov has criticized European regulators over proposals that would broaden restrictions on stablecoin yields and impose tighter controls on how regulated crypto firms provide access to decentralized finance (DeFi).

Cointelegraph reported Kulechov’s criticism in an X post as the European Union reviews its Markets in Crypto-Assets Regulation (MiCA). The review has drawn proposals from European financial authorities covering stablecoin remuneration, crypto lending and access to DeFi protocols.

Kulechov Challenges Proposed MiCA Changes

Kulechov has objected to positions advanced by the European Central Bank (ECB) and European Banking Authority (EBA), arguing that the proposed measures could extend existing restrictions beyond direct stablecoin payments.

The European System of Central Banks has called for the prohibition on stablecoin remuneration to cover activities including crypto lending, borrowing and staking. Its position is that indirect returns can reproduce the economic effect of interest payments and potentially weaken the distinction between electronic money and bank deposits.

The EBA separately recommended that the European Commission consider regulating crypto-asset lending, including activities involving regulated crypto-asset service providers giving clients access to decentralized lending protocols.

Kulechov's criticism therefore focuses on both sides of the proposed changes: restrictions on returns generated from stablecoins and additional regulatory requirements around access to DeFi services.

EU Regulators Are Reviewing DeFi Oversight

The MiCA review comes as European authorities assess how existing rules apply to newer crypto products and business models. MiCA establishes common rules for crypto-asset issuance, trading and related services across the European Union.

The EBA said in September that its review priorities include stronger rules for risks associated with multi-issuer stablecoin schemes, clarification of MiCA's scope and regulation of crypto-asset lending, including DeFi-linked activities.

The European Securities and Markets Authority (ESMA) has also proposed changes covering DeFi, staking, lending and borrowing. Its recommendations include clearer criteria for determining whether an activity is genuinely decentralized and a possible new regulated crypto-asset service for firms that provide users with access to DeFi protocols.

These proposals remain part of the broader review process rather than established amendments to MiCA.

Aave Sets Out Its Position

Aave has separately published its own response to the MiCA review, describing the process as an opportunity to establish a regulatory framework for onchain financial activity while addressing risks associated with emerging services.

The debate places regulated intermediaries at the center of the discussion. While MiCA contains an exemption for fully decentralized services, European authorities have raised questions about how decentralization should be defined and whether some activities involving DeFi remain connected to identifiable service providers.

For Kulechov, the issue is particularly relevant because Aave operates one of the major decentralized lending protocols and has a direct interest in how European rules treat access to onchain financial services.

The European Commission's MiCA review process is now moving beyond the consultation stage, with regulators continuing to develop their positions on stablecoin remuneration and DeFi oversight.

Writer: Ethan Collins
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
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