EBA Seeks Wider MiCA Rules to Tackle Crypto Lending Risks
The European Banking Authority (EBA) has called for the expansion of the Market in Crypto-Assets (MiCA) regulation in the European Union. In its response to the European Commission's consultation on the future of EU crypto rulebook, the EBA urged for broader MiCA rules across the Union, including set rules for firms that give customers access to decentralized finance (DeFi) protocols.
The EBA argues that new products and business models have created regulatory gaps since the framework entered full application, and believes additional rules could improve customer protection and strengthen supervision across the EU market.
The authority recommended adding crypto borrowing and lending activities to MiCA's regulated services, including cases where crypto-asset service providers connect users with decentralized lending protocols. It also suggested a certification system for decentralized lending protocols, so that regulated firms would only connect customers to protocols meeting set standards.
Additionally, the EBA highlighted concerns around stablecoin lending products, saying lending activities involving asset-referenced tokens (ARTs) and electronic money tokens (EMTs) could require additional restrictions under MiCA.