EU Review of Crypto Lending Regulations Sparks New Regulatory Uncertainty
The European Union is reviewing regulations for crypto lending under its Markets in Crypto-Assets Regulation (MiCA). The review comes as the Commission's DG FISMA launched a targeted consultation on May 20, 2026. The central question: should lending and borrowing of crypto assets be pulled under regulatory oversight?
The MiCA regulation was adopted on May 31, 2023, and includes a mandatory review process. Articles 140 and 142 of the regulation require an interim report by June 2025 and a full assessment by June 2027. The consultation is part of this review process.
The Commission's review explores whether due diligence requirements and potential certification systems could be applied to crypto-asset service providers (CASP) that engage with decentralized finance (DeFi) protocols. This could create a two-tier system: compliant interfaces operating within the regulatory perimeter, and raw protocol access existing outside it.
The collapse of centralized lending platforms like Celsius and BlockFi in 2022 left deep scars on institutional confidence. A clear regulatory framework that imposes accountability standards could make European crypto lending markets more attractive to traditional capital.