EBA calls for crypto lending rules under MiCA

The European Banking Authority called for crypto borrowing and lending to fall under the European Union's Markets in Crypto-Assets framework. The EBA made the recommendation in response to the European Commission's targeted consultation on MiCA. The proposal covers crypto asset service providers that facilitate access to decentralized finance lending protocols. The EBA recommended a cost-benefit analysis of legislative changes. Those changes could add intermediating crypto borrowing and lending to the services regulated under MiCA. They could also create additional compliance requirements and oversight activity. The EBA outlined potential suitability tests for users. It also outlined potential leverage limits and additional disclosure requirements. The EBA raised the possibility of restricting lending access involving asset-referenced tokens that require MiCA authorization. The possibility also covers e-money tokens that require MiCA authorization. The EBA raised the possibility of a certification regime for decentralized finance lending protocols. The EBA said crypto lending is growing across the bloc. Previous EBA research identified borrowing and lending activities in at least 16 European Union member states. The EBA said crypto firms and artificial intelligence tools are making access to decentralized finance easier. It said this trend is increasingly blurring the boundary between centralized and decentralized finance. The recommendations form part of the EBA's broader input into the Commission's MiCA review. The review also covers stablecoin rules. It covers crypto-asset classification and reporting requirements.