EBA Seeks Broader Crypto-Asset Regulation Amid Growing DeFi Lending
The European Banking Authority (EBA) has urged the European Commission to expand the scope of the Markets in Crypto-Assets Regulation (MiCA) to include decentralized finance (DeFi) lending and borrowing. The EBA wants MiCA to cover services that connect users to DeFi protocols, including suitability tests, leverage caps, and a certification regime for lending protocols.
The current rules only cover intermediated activity between clients and service providers, but the EBA believes that this is not enough to address the growing use of DeFi lending. The authority points out that DeFi lending protocols now hold around $30.66 billion in active loans, up from a June low of $23.29 billion.
The EBA also wants MiCA to place third-country multi-issuer stablecoin schemes under a dedicated regulatory and supervisory regime. These schemes involve US dollar-denominated tokens and have significant risks associated with them.