EU regulators consider extending MiCA to DeFi lending services

The European Banking Authority (EBA) has recommended that the European Commission expand the Markets in Crypto‑Assets (MiCA) regime to cover crypto borrowing and lending, including services that give customers access to decentralized finance (DeFi) lending protocols.

Proposed regulatory measures

The EBA’s suggestions include:

• Suitability tests for users of crypto lending services
• Leverage limits for borrowing activities
• Additional disclosure requirements for firms providing crypto lending
• Possible restrictions on lending products that use asset‑referenced tokens (ARTs) or e‑money tokens (EMTs)
• A certification regime for DeFi lending protocols, especially where regulated firms act as gateways for customers

Context of the MiCA review

MiCA, which entered into force on 30 December 2024, currently regulates crypto‑asset issuers and service providers but does not fully address lending, borrowing, staking or many DeFi activities. The European Commission opened a review of MiCA in May, with a consultation running until 30 September. The EBA’s recommendations will be considered as part of this review and could lead to legislative changes.

Stablecoin focus

The EBA also highlighted stablecoins, noting that policymakers might restrict borrowing and lending involving ARTs and EMTs that require MiCA authorisation. Recent proposals from the European System of Central Banks call for MiCA’s stablecoin remuneration rules to cover lending, borrowing and staking arrangements that generate indirect returns.

Industry impact

Crypto firms that currently intermediate DeFi lending or provide interfaces to decentralized protocols could face new compliance obligations if the Commission expands MiCA. The gap is already visible: some providers, such as Nexo, separate their lending products from the regulated services offered through European partners.

Next steps

The EBA’s recommendations are not final rules; they will feed into the Commission’s assessment and may result in a legislative proposal after the review period.