EU Weighs New Rules for Crypto Lending Amid Consumer Risks
The European Commission will close its consultation on EU crypto rules by September 30. Banking authorities want it to consider new rules for lending and borrowing through decentralized finance, or DeFi.
The European Banking Authority asked the Commission to assess rules for firms that arrange crypto loans. The EBA's response also covers crypto firms that connect customers to DeFi lending through an app or product.
The EBA proposed examining suitability checks, leverage limits, and clearer information about lending terms. It also suggested warnings for customers using protocols described as 'truly decentralized.'
Consumer risks drive calls for safeguards. The authority identified gaps in information about fees, yields, and changes to collateral requirements.