EU Banking Authority Urges Inclusion of Crypto Lending in MiCA Framework

The European Banking Authority (EBA) has submitted recommendations to the European Commission urging that crypto lending activities be incorporated into the Markets in Crypto-Assets (MiCA) regulatory framework.

Key Recommendations

• Conduct a cost‑benefit analysis of adding crypto borrowing and lending to the list of MiCA‑regulated services.
• Introduce suitability tests for users, leverage limits, and enhanced disclosure requirements.
• Consider restricting lending involving asset‑referenced or e‑money tokens that require MiCA authorization.
• Develop a certification regime for decentralized finance (DeFi) lending protocols.

Rationale

The EBA notes that crypto lending is expanding across the EU, with activity documented in at least 16 member states. It highlights that the growing use of crypto service providers and AI tools is blurring the line between centralized and decentralized finance, prompting the need for clearer oversight.

Broader Context

These recommendations are part of the EBA’s broader input to the Commission’s review of MiCA, which also addresses stablecoin regulation, crypto‑asset classification, and reporting obligations.