EU Regulator Urges Crypto Lending Rules Amid Growing Volumes

The European Banking Authority (EBA) has recommended that the European Commission consider regulating crypto borrowing and lending under MiCA, the EU's crypto rulebook. Currently, MiCA does not cover crypto lending, but it bars stablecoin issuers and crypto-asset service providers from paying interest on stablecoins.

The EBA wrote that crypto lending is 'growing in volume and value' and cited a January 2025 joint report with ESMA that found it being intermediated in at least 16 member states. CASP interfaces are making DeFi easier to reach, the regulator said, and crypto firms facilitating access are 'further blurring the boundary between centralised and decentralised finance.'

The EBA asked the Commission to run a cost-benefit analysis of two changes: adding the brokering of crypto borrowing and lending to the services MiCA regulates, and setting requirements for CASPs that connect clients to DeFi lending protocols. The options include suitability tests, leverage caps for some or all users, detailed disclosures, and warnings that activities on truly decentralized protocols 'are unregulated and thus no safeguards apply.'

The EBA also raised a certification regime for DeFi lending protocols, which could assess a protocol's resilience to cyberattack. Another option would stop CASPs from brokering or facilitating lending involving tokens meeting MiCA's stablecoin definitions but lacking authorization.