EU Commission to Review DeFi Lending Rules Under MiCA Framework

The European Banking Authority (EBA) has requested that the European Commission evaluate potential new regulations for crypto-asset service providers (CASPs) that facilitate access to DeFi lending. The EBA's proposal, submitted on September 24, suggests two regulatory paths: classifying intermediated crypto borrowing and lending as a CASP service under MiCA, or establishing specific requirements for CASPs that provide interfaces or products linked to DeFi protocols. While the EBA cites consumer protection as the primary driver for this review, no new rules have been enacted, and direct interaction with smart contracts remains outside the current scope. The Commission is expected to weigh the risks and retail participation levels before deciding on future legislative action, which could include suitability tests, leverage caps, and mandatory disclosures for DeFi-related services.