Aave Urges EU to Rewrite MiCA Rules for DeFi and Stablecoins

Aave Labs has submitted its response to the European Commission's review of the Markets in Crypto-Assets Regulation (MiCA), calling for a regulatory framework that accommodates decentralized finance (DeFi) and stablecoins.

Stani Kulechov, Aave founder and CEO, said that 'onchain finance brings access and transparency that legacy financial rails lack today.'

Aave Labs proposed a phased shift toward on-chain lending and tokenization in its 57-page submission to the EU's MiCA review. The company argued that regulators should not automatically treat open-source protocols like centralized financial intermediaries.

The submission noted that an identifiable legal person controlling an activity and exercising ongoing discretion over users, terms or assets should be regulated. However, Aave Labs said developers who neither control user assets nor exercise discretion over a service should not be treated as intermediaries.