EU banking watchdog calls for crypto lending rules under MiCA

The European Banking Authority (EBA) has urged the European Union to bring crypto lending under the MiCA framework as the bloc reviews its crypto rules. In a response to the European Commission’s consultation, the EBA said borrowing and lending services involving crypto assets should be regulated, including cases where firms give users access to decentralized finance (DeFi) lending protocols. The watchdog suggested that lawmakers study the costs and benefits of expanding MiCA to cover intermediated crypto lending. It also proposed possible requirements such as suitability checks, leverage limits, and stronger disclosure rules. In some cases, it said access to lending involving assetreferenced tokens or emoney tokens could be restricted, and DeFi protocols could face a certification regime. The EBA said crypto lending is expanding across the EU and noted that activity has been identified in at least 16 member states. It added that the growing use of DeFi tools and artificial intelligence is making the line between centralized and decentralized finance less clear. The recommendations are part of the broader MiCA review, which also covers stablecoins, crypto classification, and reporting rules.