EBA Calls for Regulation of Crypto Lending Under MiCA Framework

The European Banking Authority (EBA) has called for crypto lending to be brought under the EU's Markets in Crypto-Assets (MiCA) framework. The EBA responded to the European Commission's targeted consultation on MiCA, suggesting that crypto borrowing and lending should be regulated.

Crypto asset service providers facilitate access to decentralized finance (DeFi) lending protocols, which should also be subject to regulations according to the EBA. The regulator recommended a cost-benefit analysis of potential legislative changes that could add intermediating crypto borrowing and lending to MiCA's list of services.

The EBA proposed measures such as suitability tests for users, leverage limits, and additional disclosure requirements. It also suggested restrictions on access to lending involving asset-referenced or e-money tokens that require MiCA authorization and the introduction of a certification regime for DeFi lending protocols.