Key points

  • The EBA asked the European Commission to consider regulating crypto-asset lending, including access to decentralised lending protocols facilitated by service providers.
  • The recommendation is an input to the MiCA review, not a binding rule or an enacted amendment.
  • The Commission's consultation remains open until September 30 at 23:59 CEST and may inform a later legislative proposal.

A recommendation, not a new rule

The European Banking Authority has urged the European Commission to consider bringing crypto-asset lending more clearly within the European Union's Markets in Crypto-Assets framework. The recommendation covers conventional intermediated lending and situations in which a crypto-asset service provider helps customers reach decentralised lending protocols. It was published in the EBA's September 24 response to the Commission's MiCA review and was highlighted again as the consultation approached its September 30 deadline. No new obligation has taken effect. The EBA's paper is advice to the Commission, which must decide whether further assessment or legislation is warranted.

The access point is central to the debate

MiCA already regulates many issuers and crypto-asset service providers, but lending and borrowing are not listed as a standalone service in the same way as custody, trading or exchange. The EBA said the Commission should consider regulation where service providers facilitate access to decentralised lending protocols because of consumer risks. That distinction matters. A customer may interact with a smart contract directly, or reach the same protocol through an exchange, wallet or other commercial interface. The recommendation focuses attention on the regulated business that selects, presents or connects users to the service, without establishing that every software protocol would become a licensed entity.

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Consumer protection drives the proposal

Crypto lending can expose users to volatile collateral, liquidation, smart-contract failures and incomplete information about how yields are generated. Those risks can be difficult to compare when a centralised company provides the front end while a decentralised protocol executes the loan. The EBA did not announce a final compliance model, but its intervention signals that supervisors want clearer responsibility when a commercial provider sits between a retail customer and a lending protocol. Exchanges, wallet operators and other firms that promote or package access could therefore face new duties if the Commission eventually proposes amendments and EU lawmakers adopt them.

MiCA's wider scope is also under review

The lending recommendation is part of a broader EBA request to clarify MiCA's boundaries and definitions. The authority said inconsistent classification of crypto-assets can create avoidable costs, delay product launches and complicate supervision. It also asked the Commission to review reporting and risk-monitoring arrangements for issuers and service providers. For stablecoins, the EBA said the existing framework for asset-referenced and electronic money tokens is broadly appropriate, while calling for stronger treatment of some third-country multi-issuer structures and a review of reserve requirements. Those separate proposals show that the review extends beyond DeFi lending.

The Commission controls the next step

The Commission opened its targeted MiCA consultation on May 20 and extended the deadline to September 30 at 23:59 CEST. It says the responses will help prepare reports required under Articles 140 and 142 of MiCA and may, if justified, accompany a legislative proposal to amend or complement the regulation. That process leaves important questions unresolved, including which lending activities would be covered, how obligations would apply to access providers and where regulators would draw the line around genuinely decentralised software. National supervisors and industry respondents can still influence that assessment through the consultation, but the final policy choice belongs to the Commission and, for legislation, EU lawmakers. Until the Commission publishes its conclusions, firms should treat the EBA position as a policy signal rather than an enacted expansion of MiCA.

Sources

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