EU Consultation Weighs Crypto Lending Rules Under MiCA

Instead of trying to regulate the protocol itself, Brussels may focus on the centralized entities that connect users to decentralized services. The Commission is exploring whether due diligence requirements and certification systems could apply to CASPs that engage with DeFi protocols.

The review involves consultations with both ESMA and the European Banking Authority, bringing the EU's two most important financial regulators into the conversation.

For centralized crypto lenders operating in Europe, any revised framework – sometimes called MiCA 2 informally – would almost certainly impose new compliance obligations. Capital requirements, risk disclosure mandates, and licensing regimes specifically for lending activities are all on the table.

The collapse of platforms like Celsius and BlockFi in 2022 left deep scars on institutional confidence. A clear regulatory framework that imposes accountability standards could make European crypto lending markets more attractive to traditional capital, several industry participants said.

If the Commission decides that any entity providing a front-end interface to a DeFi lending protocol needs certification, it would effectively create a two-tier system. Compliant interfaces operate inside the regulatory perimeter. Raw protocol access exists outside it.

The consultation window closes August 31. After that, the Commission will synthesize responses and work toward its June 2027 deadline for the full assessment.