The European Banking Authority calls for incorporating crypto lending into the MiCA regulatory framework, proposing leverage limits and appropriateness tests.

BlockBeats news, September 24: In its response to the European Commission's targeted consultation on MiCA, the European Banking Authority (EBA) called for bringing crypto lending into the EU's crypto asset market regulatory framework, including situations where crypto asset service providers facilitate client access to DeFi lending protocols. The EBA recommended that the European Commission conduct a cost-benefit analysis on legislative changes to include intermediated crypto lending in the list of regulated services under MiCA, potentially with specific compliance requirements and supervisory activities. It also proposed related requirements for crypto companies providing clients with access to DeFi lending protocols.

The potential measures listed by the EBA include: conducting suitability tests for users, setting leverage limits, increasing disclosure requirements, and possibly restricting lending access involving asset-referenced tokens or e-money tokens that require MiCA authorization, as well as introducing a certification system for DeFi lending protocols. The EBA noted that crypto lending continues to grow within the EU, with prior research showing lending activity in at least 16 member states. Easier access to DeFi through crypto companies and AI tools is increasingly blurring the boundaries between centralized and decentralized finance.