EU Ponders DeFi Lending Rules as September 30 Deadline Looms

The European Banking Authority (EBA) has asked the European Commission to examine new rules for crypto firms that connect customers to DeFi loans. The EBA's September 24 response calls for a cost-benefit analysis of possible duties for intermediated borrowing and lending, and for crypto-asset service providers (CASPs) that give clients access to DeFi lending through interfaces or products.

A loan can run on an on-chain protocol while a company supplies the app that brings a customer to it. The EBA's recommendation puts that company-controlled route within the Commission's review, and it is a request to assess legislation, so the EBA's response itself changes no lending rule.

The regulator said consumer risks prompted its call to examine the issue. The EBA's MiCA review maps potential CASP roles in DeFi lending, while direct smart-contract use remains unresolved and no new rule is enacted.