Banking regulators of the European Union are calling for regulation of crypto credit issuance under MiCA

What's going on?

The European Banking Authority (EBA), the EU's banking regulator, has submitted a proposal to the European Commission (EC) for "cryptocurrency lending" to be regulated under the Markets in Asset Act (MiCA).

The proposal is part of the EC's response to a survey (targeted consultation) currently under review by MiCA.

Why does the EBA have to push this?

EBA previously reported that crypto lending activity had occurred inAt least 16 Member States of the European Union And as it continues to grow, a point of concern for the agency is that crypto services companies are helping users access DeFi 's lending platform more easily, including using AI tools to help blur the lines between centralized and distributed finance.

What do you have to offer?

EBA recommends that the EC conduct a cost-benefit analysis before amending the law, and may add "cryptocurrency lending" services to the list of services subject to licensing under MiCA measures as follows:

• การทดสอบความเหมาะสมของผู้ใช้ (suitability tests) before participating in the loan
• Limiting the use of leverage of the borrower
• Provision for disclosure of further information From the service provider
• For the Council of MinistersRestricted accessLoans related to asset-referenced tokens or e-money tokens , which must be approved under MiCA
• The establishment of an accreditation system Protocol DeFi on the granting of loans

In addition, the EBA also proposes to impose specific regulations on crypto companies that help facilitate customers' access to its DeFi lending protocol.

How wide is this review?

The EBA proposal is just part of the EC's revised MiCA review, which also covers other topics such as stablecoin rules, cryptoasset classification and data reporting requirements.

Related to who?

Although the MiCA rules are directly enforceable in the European Union, they may affect global players because many multinational crypto companies use the EU as a key marketplace. If cryptocurrency lending is regulated in the same way as traditional money businesses, related platforms and services such as DeFi might need to adjust their licensing and compliance requirements to avoid risk.

Both proposals still need to be analysed and considered by the EC before they can become binding law.

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