EBA Recommends Bringing Crypto Lending Under MiCA Regulation

Odaily reports: The European Banking Authority (EBA) has stated that the EU should bring crypto asset lending under the Markets in Crypto-Assets (MiCA) framework, and that the regulatory scope should also cover situations where crypto asset service providers assist clients in accessing decentralized finance (DeFi) lending protocols.

The EBA recommends that the European Commission (EC) conduct a cost-benefit analysis of the relevant legislative changes, and consider adding compliance requirements and supervisory activities for intermediated crypto lending services, while also setting additional requirements for crypto firms that provide access to DeFi lending protocols.

Potential measures include user suitability tests, leverage limits, and additional disclosure requirements; the EBA also proposes restricting lending involving asset-referenced tokens or e-money tokens that require MiCA authorization, and establishing a certification system for DeFi lending protocols.

The EBA noted that crypto lending is already taking place in at least 16 EU member states, and that access to DeFi through crypto firms and AI tools is increasingly blurring the line between centralized and decentralized finance. The recommendations are part of the MiCA review opinion, which also covers stablecoin rules, crypto asset classification, and reporting requirements. (Cointelegraph)