The European Banking Authority recommended on Sept. 24 that the European Commission consider bringing crypto borrowing and lending under Markets in Crypto-Assets regulation, or MiCA, including cases where licensed crypto firms give customers access to DeFi lending protocols.
MiCA does not currently cover crypto lending. It already bars stablecoin issuers and crypto-asset service providers, or CASPs, from paying interest on stablecoins. Even so, lending a stablecoin can still generate yield for its holder, and the EBA said in its written response that this may create regulatory arbitrage risks.
Crypto lending growth and easier DeFi access
The EBA said crypto lending is growing in both volume and value. It cited a joint report with the European Securities and Markets Authority, published in January 2025, that found the activity was being intermediated in at least 16 member states.
The regulator also said CASP interfaces, along with general-purpose AI tools, are making DeFi easier to access. Crypto firms that help users reach those protocols are, in the EBA’s view, making the line between centralized and decentralized finance less clear.
Two MiCA changes under review
The EBA asked the Commission to conduct a cost-benefit analysis of two possible changes. One would add the brokering of crypto borrowing and lending to the list of services regulated under MiCA. The other would impose requirements on CASPs that connect clients to DeFi lending protocols.
The options it listed include suitability tests, leverage caps for some or all users, more detailed disclosures, and warnings that activities on truly decentralized protocols are unregulated and carry no safeguards.
DeFi certification and limits on unauthorized stablecoin lending
The EBA also raised the possibility of a certification regime for DeFi lending protocols. At a minimum, that framework could assess a protocol’s resilience to cyberattacks.
Another option would bar CASPs from brokering or facilitating lending involving tokens that meet MiCA’s stablecoin definitions but do not have authorization.
The EBA said two stablecoins dominate crypto lending. One is issued by an e-money institution. The other meets MiCA’s definition of an e-money token but cannot be offered to the public in the EU because the issuer chose not to seek authorization under MiCA. The regulator did not identify either token.
Part of the Commission’s MiCA review
The response forms part of the European Commission’s MiCA review consultation, which opened on May 20 and closes on Sept. 30.
In their own response, the European Central Bank and the EU’s national central banks said MiCA’s ban on stablecoin yield should extend to lending, borrowing, and staking.
The EBA also called for tighter rules on third-country multi-issuer schemes, in which an EU issuer issues the same token as a non-EU issuer. It said those structures pose “significant to very significant risks.”
It also asked for a review of how much of an issuer’s reserves must be held as bank deposits.
As of Sept. 1, the EBA counted 39 e-money tokens issued under MiCA and no authorized asset-referenced tokens. On its consultation page, the Commission said its MiCA report may, if warranted, be accompanied by a legislative proposal to amend the regulation.