EU Banking Watchdog Urges Brussels to Bring Crypto Lending and DeFi Under MiCA Oversight - finance.biggo.com

The European Banking Authority (EBA) has called on Brussels to extend the scope of the Markets in Crypto-Assets (MiCA) regulation to cover crypto lending and decentralized finance (DeFi). The recommendation reflects a view among supervisors that activity in these segments falls outside the current framework, leaving gaps in consumer protection and prudential oversight.

For markets, the proposal signals a potential shift in how EU regulators treat products that sit between traditional finance and decentralized protocols. Crypto lending platforms — which intermediate deposits and loans — resemble banking activity in some respects, while DeFi protocols operate without a central issuer or intermediary, raising questions about how obligations could be assigned and enforced.

What to watch: whether the European Commission formally proposes amendments to MiCA or introduces separate legislation, and how any new rules would define covered entities and activities. Also relevant is timing, since MiCA's provisions are being phased in. For now, the EBA's stance is a policy signal, not a binding rule — market participants should track official EU communications rather than treat the recommendation as settled law.