EBA Proposes Including Crypto Lending and DeFi Under MiCA Regulation

The European Banking Authority (EBA) has recommended that the European Commission incorporate crypto lending services into the Markets in Crypto-Assets (MiCA) regulatory framework. The proposal suggests that regulations should cover not only traditional crypto asset service providers but also those facilitating access to decentralized finance (DeFi) lending protocols. The EBA advises conducting a cost-benefit analysis to evaluate the feasibility of regulating these services, with potential requirements including user suitability tests, leverage limits, enhanced disclosure obligations, and a possible certification mechanism for DeFi lending protocols.