EU Parliament Panel Urges Broader Crypto Regulation Review

The European Parliament's economic affairs committee wants the European Commission to assess whether crypto lending, staking, NFTs and decentralized finance need additional regulation. The recommendations were included in a report tabled Friday for a plenary vote expected on July 7.

If adopted, the resolution would become Parliament's official position on digital asset policy. It would not amend the Markets in Crypto-Assets Regulation or create immediate legal obligations. Belgian MEP Johan Van Overtveldt drafted the report as an own-initiative resolution from the Committee on Economic and Monetary Affairs. Its purpose is to set policy direction for the Commission as Europe moves from passing crypto rules to deciding where the current framework may be incomplete.

The timing matters. MiCA has already established a regulatory base for crypto asset service providers and stablecoin issuers across the European Union. Several major areas remain outside its clearest scope, including DeFi protocols, staking services, NFT markets, crypto lending, borrowing activity and tokenized financial assets.

The committee's recommendations focus on activities that have become large enough to raise market structure, consumer protection and financial stability questions. They do not always fit neatly inside traditional licensing rules.

Crypto lending and borrowing raise questions around collateral management, liquidation risk, disclosure and platform solvency. Staking raises separate issues around yield, custody, validator responsibility and whether users understand the operational risks behind advertised returns. NFTs remain difficult to regulate because some function as collectibles, while others can resemble investment products or access rights.

DeFi is the hardest category. Many decentralized protocols do not have a conventional operator, board, headquarters or licensed intermediary. That makes enforcement and supervision more complicated than in centralized exchange or custody models. Any attempt to regulate DeFi under a MiCA-style approach would require the Commission to decide whether rules should apply to front-end providers, developers, governance token holders, validators, or other actors connected to the protocol.

The report does not call for immediate new rules in those areas. Instead, it asks the Commission to assess whether additional activity should be regulated. That language keeps the door open for expansion while avoiding a direct legislative fight before the review process is complete.

The report also reflects a more constructive view of regulated stablecoins. It welcomed euro-denominated stablecoins under MiCA and encouraged their development to support the bloc's payments sector. That is a shift from earlier political skepticism toward crypto assets. In 2023, Van Overtveldt called for tighter restrictions on cryptocurrencies following the banking turmoil around Silicon Valley Bank, Signature Bank and Silvergate Bank. That episode also put stablecoins under pressure after USDC issuer Circle disclosed that roughly $3.3 billion of its reserves were held at Silicon Valley Bank when it collapsed, briefly causing USDC to lose its dollar peg.