EU banking watchdog calls for crypto lending rules under MiCA

The EBA outlined potential rules for crypto lending and firms providing access to DeFi protocols as part of the European Commission’s MiCA review.

The European Banking Authority (EBA) has called for crypto lending to be brought under the European Union’s Markets in Crypto-Assets (MiCA) framework as regulators consider potential changes to MiCA. 

In a response to the European Commission’s (EC) targeted consultation on MiCA, the EBA said crypto borrowing and lending should be regulated, including where crypto asset service providers facilitate access to decentralized finance (DeFi) lending protocols.

The regulator recommended that the EC conduct a cost-benefit analysis of legislative changes that could add intermediating crypto borrowing and lending to the list of services regulated under MiCA, potentially adding specific compliance requirements and oversight activity. It also suggested requirements for crypto firms that provide clients access to DeFi lending protocols.

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