EU Banking Watchdog Urges Brussels to Bring Crypto Lending and DeFi Under MiCA Oversight - finance.biggo.com

The European Banking Authority has called on Brussels to extend the scope of the Markets in Crypto-Assets regulation, known as MiCA, to cover crypto lending and decentralized finance. The watchdog's recommendation reflects a concern that activity falling outside the current framework could leave gaps in investor protection and market supervision.

For market participants, the proposal signals a possible shift in how crypto lending platforms and DeFi protocols operating in or serving the EU may be regulated. MiCA already sets rules for many crypto assets and service providers, but lending products and decentralized structures have sat largely beyond its perimeter.

What to watch is the legislative response. Any formal expansion would move through the EU's ordinary procedures, meaning scope, timing and definitions remain open questions. Until then, the practical effect is directional rather than immediate. Firms and users should monitor official communications from EU institutions for concrete proposals, since the boundaries drawn around lending and DeFi will shape compliance obligations and market structure over time.