Coinbase Warns MiCA Review Could Drive EU DeFi Users Offshore

Coinbase's European policy lead has warned that changes to the EU's Markets in Crypto-Assets regulation (MiCA) under review could push decentralized finance (DeFi) users toward offshore platforms, according to remarks reported by TechFlow and TokenPost.

The warning centres on suitability tests. Patrick van der Stappen, Coinbase's head of EU policy, said extending such tests beyond lending and borrowing to other DeFi services could treat a simple stablecoin swap in the same way as leveraged lending, despite the two activities carrying fundamentally different risk profiles. As TokenPost noted, applying checks beyond lending and borrowing remains a hypothetical outcome in his warning rather than the current scope of the European Banking Authority's consultation.

Van der Stappen called for a proportionate approach: one that would let crypto-asset service providers (CASPs) continue offering access to DeFi protocols while matching safeguards to the actual risk of each activity.

What sits behind the warning?

The comments follow the European Commission's formal review of MiCA. On 30 September 2026, the European Securities and Markets Authority (ESMA) published its response recommending a new regulated crypto-asset service category for firms that give users access to DeFi protocols. ESMA also asked for clearer criteria on which activities can genuinely be considered decentralised.

ESMA went further on enforcement posture. It warned of what it calls "decentralisation washing" — cases where an identifiable operator adopts DeFi-style language to avoid MiCA obligations, according to Securities.io. The regulator's position is that the DeFi exemption should be drawn as narrowly as possible.

For licensed CASPs, the practical stakes are straightforward. A suitability-test regime that treats a stablecoin swap as equivalent to leveraged lending would raise compliance costs on low-risk flows and, in Coinbase's framing, create an incentive for users to route the same activity through unregulated offshore venues outside the EU's perimeter entirely.

Is ESMA's position final?

No. ESMA's response is advisory, not binding. Any change to MiCA would require a formal Commission proposal followed by adoption by both the European Parliament and the Council, according to a summary of the regulator's response.

The timeline is set. TokenPost reported that the Commission is due to report to EU lawmakers by 30 June 2027, and that this report could include proposals to amend the regulation. That gives the industry and national competent authorities a defined window — measured in months, not years — to shape how any new DeFi access category is designed.

What does this change for practitioners? Nothing immediately: MiCA's current text stands, and suitability checks apply to lending and borrowing as implemented. What changes is the drafting calculus. Firms building DeFi access products for EU clients now face a two-path decision — engineer for a narrowly drawn exemption that ESMA wants tightened, or position for the proposed regulated access category whose obligations remain undefined.

The debate reflects a wider tension in EU crypto policy between investor protection and keeping regulated access to DeFi workable. Whether the Commission adopts ESMA's proposed DeFi access category, and how the suitability perimeter is drawn inside it, will determine how far the concerns raised by Coinbase come into play.

The next concrete checkpoint is the Commission's report to Parliament and the Council, due by 30 June 2027.