EBA urges MiCA revisions to cover crypto lending and DeFi intermediation

The European Banking Authority has formally urged the EU to bring crypto lending and DeFi intermediation within the scope of its Markets in Crypto-Assets regulation, or MiCA. In a report submitted to the European Commission, the EBA recommended leverage limits, user suitability assessments, disclosure requirements and a certification regime for DeFi protocols for lending services offered by crypto-asset service providers, or CASPs, including DeFi-linked lending. The recommendation comes as crypto lending has surged across more than 16 EU countries and access to DeFi through AI and centralized exchanges has expanded, blurring the boundary between CeFi and DeFi.