EBA pushes for MiCA expansion as EU targets crypto lending risks

The European Commission’s consultation on the future of the EU’s crypto rulebook closed on September 30, and the European Banking Authority (EBA) has made one of the clearest cases for widening it. 

In its response, published on September 24, EBA urged for broader MiCA rules across the Union, for set rules for firms that give customers access to decentralized finance (DeFi) protocols, for a tightening of oversight of certain stablecoins, as well as for the clarification on how crypto-assets are classified.  

EBA argues that new products and business models have created regulatory gaps since the framework entered full application, and believes additional rules could improve customer protection and strengthen supervision across the EU market. 

The recommendations do not change MiCA’s current requirements, though they will shape the Commission’s decision on whether to rewrite the regulation. 

Crypto lending and DeFi access: Top priorities 

EBA recommended adding crypto borrowing and lending activities to MiCA’s regulated services, including cases where crypto-asset service providers connect users with decentralized lending protocols. 

The authority also asked the Commission to run a cost-benefit analysis before amending the regulation, and identified several possible requirements for these activities: suitability checks, leverage limits, and stronger risk disclosures for users.