EU Banking Regulator Pushes to Fold Crypto Lending Into MiCA
In advice to the European Commission, the EBA recommends regulating crypto borrowing and lending, with possible leverage caps, suitability checks and a certification regime for DeFi protocols.
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The European Banking Authority wants the European Union to extend its Markets in Crypto-Assets rulebook to crypto lending, saying firms that connect customers to decentralized finance protocols should face the same supervision as other crypto services.
The advice, submitted in response to the European Commission's targeted consultation on MiCA, forms part of the regulator's input into a broader review of the framework. The EBA argued that intermediated crypto borrowing and lending should be added to the list of regulated activities under MiCA, bringing with it new compliance obligations and oversight.
Among the measures the authority floated: suitability tests for users, caps on leverage and extra disclosure duties for firms. It went further on the protocol side, suggesting the Commission could restrict lending tied to asset-referenced and e-money tokens — the MiCA-authorized categories that include many stablecoins — and introduce a certification scheme for DeFi lending protocols themselves.
Cointelegraph reported the details from the EBA's consultation response.
The case for extending MiCA
The regulator justified the intervention by pointing to growth in the market. It cited earlier research finding borrowing and lending activity across at least 16 EU member states. The EBA also flagged a convergence problem: as crypto firms make DeFi platforms easier to reach, and as artificial intelligence tools lower the technical barriers, the line between centralized and decentralized finance is becoming harder to draw.
That blurring, in the regulator's view, is the argument for treating access to DeFi lending as a regulated service rather than leaving it outside the perimeter.
The recommendations land amid a wider Commission review of MiCA. Alongside lending, the review touches on stablecoin rules, how crypto assets are classified, and reporting requirements — areas that could reshape how the framework applies once revisions are tabled.
No legislative changes have been proposed yet. The EBA framed its suggestions as options for the Commission to weigh, recommending a cost-benefit analysis before any of them are written into law.
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