European Banking Authority urges EU to set DeFi lending rules for crypto platforms

The European Banking Authority wants Brussels to decide whether apps and platforms that route retail customers into DeFi lending pools should face the same obligations as traditional crypto lenders. The recommendation lands just before the European Commission’s own MiCA review consultation closes, giving regulators a narrow window to shape how billions in on-chain lending activity gets treated under EU law.

• EBA’s September 24 response urges a cost-benefit analysis of duties for crypto firms that give customers DeFi lending access
• The European Commission’s targeted consultation on the MiCA review closes September 30 at 11:59 p.m. CEST

• Sept 24 date the EBA sent its formal MiCA review response to the Commission
• Sept 30 deadline for the Commission’s targeted consultation feeding the review
• 39 EMTs e-money tokens issued under MiCA versus zero authorized asset-referenced tokens
• 0 ARTs asset-referenced tokens authorized under MiCA

The European Banking Authority has asked the European Commission to examine new obligations for crypto-asset service providers that connect customers to DeFi loans, CryptoSlate reported. The regulator’s Thursday, September 24 response calls for a cost-benefit analysis rather than proposing a finished rule. It cites consumer risk as the reason regulators need to look at the issue now.

EBA floats two changes to MiCA’s crypto-asset service provider list

The EBA’s response lays out two concrete options for the Commission to weigh. The first would add intermediating crypto borrowing and lending to the list of licensed activities under the Markets in Crypto-Assets regulation, formally Regulation (EU) 2023/1114. The second would impose requirements on CASPs that facilitate access to DeFi lending protocols, whether through an app interface or a product that offers exposure to DeFi.

A loan itself can still execute entirely on-chain through a smart contract. What the EBA wants examined is the company-controlled layer, the interface or product that brings a retail customer to that protocol in the first place.

Possible safeguards described in the filing include suitability tests to determine whether a customer should participate, leverage caps, and expanded disclosure requirements. For DeFi-specific access, the EBA suggested warnings that a truly decentralized protocol may carry no regulatory safeguards at all, plus a possible certification regime testing lending protocols for resilience to cyberattacks. A separate proposal would bar CASPs from intermediating or facilitating lending involving tokens that meet MiCA’s definition of an asset-referenced or e-money token but whose issuer lacks authorization.

MiCA stablecoin data shows an issuance gap the EBA wants closed

The EBA’s underlying press release accompanying the response extends well beyond lending. It flags risks from third-country multi-issuer stablecoin schemes as significant to very significant and recommends the Commission tighten reserve rules, including the minimum share of reserves issuers must hold as deposits.

The EBA counts 39 e-money tokens issued under MiCA against zero authorized asset-referenced tokens, a gap the authority frames as evidence the ART framework needs review alongside lending rules.

The EBA also names classification of crypto-assets as a persistent problem, saying inconsistent treatment creates avoidable costs and delays that slow product launches and weaken the EU market’s competitiveness. Separately, guidance published by decentralized-lending platform Aave describes multiple entry points into its protocol, including its own interface, third-party applications, and direct smart-contract interaction, illustrating exactly the kind of app-mediated access the EBA wants brought inside MiCA’s scope. Neither Aave’s documentation nor comparable guides for wallets such as MetaMask establish whether a given feature is offered to EU customers or how any specific operator would be classified under a future rule.

Commission consultation closes September 30 before any legislative move

The Commission’s targeted consultation on the MiCA review closes Wednesday, September 30 at 11:59 p.m. Central European Summer Time. Responses will feed a Commission report on MiCA’s application and on broader crypto-market developments, which the Commission has said may be accompanied by a legislative proposal if warranted.

Nothing in the EBA’s response changes any lending rule today. It is a recommendation to study the issue, not a binding requirement.

The EBA’s own priorities list also calls for reviewing the reporting framework that applies to token issuers and CASPs, aiming to give supervisors better tools to monitor risk. Whether the Commission adopts any of the six DeFi-lending safeguards the EBA outlined, or instead narrows its focus to stablecoin reserves and classification, remains an open question the report is meant to resolve.

The BlockWest read. The real fight here is not over smart contracts but over the app layer sitting on top of them. If Brussels adopts the CASP-facilitation standard, firms like the ones running MetaMask-style front ends would need suitability checks and leverage caps even though the underlying protocol stays unregulated, pushing compliance costs onto interface providers rather than protocols themselves.

The Commission’s targeted consultation closes Wednesday, September 30 at 11:59 p.m. CEST, after which its report on MiCA’s application, and any accompanying legislative proposal, will determine whether the EBA’s DeFi-lending safeguards move from recommendation to binding rule.

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