The European Banking Authority (EBA) has officially urged the inclusion of virtual asset lending and DeFi service brokerage activities within the scope of MiCA regulation, in connection with the European Union's (EU) Markets in Crypto-Assets (MiCA) review process. In a report submitted to the European Commission (EC), the EBA recommended setting leverage limits, conducting user suitability assessments, imposing disclosure obligations, and introducing a DeFi protocol certification system for lending services provided by Crypto-Asset Service Providers (CASPs) and DeFi-linked loans. The background to this recommendation for stronger regulation is analyzed to be the recent surge in virtual asset lending in more than 16 EU countries and the blurring of boundaries between CeFi and DeFi due to expanded DeFi access through AI and CEX.
