EBA Pushes for Tighter Crypto Lending Regulation Under MiCA

The European Banking Authority (EBA) has proposed that crypto lending and Decentralized Finance (DeFi) protocol intermediation services be brought within the scope of MiCA, the European Union's crypto regulatory framework. The EBA stated that not only direct lending by crypto firms but also the facilitation or support of customer access to DeFi lending protocols should be added to the list of regulated services.

The recommendation aims to close regulatory gaps and comes as the European Commission reviews potential amendments to MiCA. The supervisory authority recommended conducting a cost-benefit analysis ahead of any MiCA amendment to assess adding intermediated crypto lending to the list of regulated services.

The EBA proposed specific measures, including customer suitability assessments, leverage limits, and additional disclosure obligations for crypto firms providing these services. It also raised the possibility of restricting access to loans linked to asset-referenced tokens or e-money tokens that require MiCA authorization.