The European Banking Authority recommended on September 24 that the EU extend the Markets in Crypto-Assets Regulation (MiCA) to cover crypto lending, borrowing, and decentralized finance, days before the European Commission's framework consultation closed on September 30.

EBA urged the Commission to add crypto lending and borrowing activities to MiCA's regulated services. That includes cases where crypto-asset service providers connect users to decentralized lending protocols.

The authority flagged stablecoin lending as a particular concern, warning that products involving asset-referenced tokens (ARTs) and electronic money tokens (EMTs) could require additional restrictions.

What does EBA want changed on lending?

EBA proposed suitability checks, leverage limits, and stronger risk disclosures for users engaging in crypto lending. It also recommended a certification system for decentralized lending protocols, so regulated firms only connect customers to protocols meeting defined standards.

Intermediated crypto lending services already operate in at least 16 EU member states, according to earlier research by European regulators. EBA asked the Commission to run a cost-benefit analysis before amending the regulation.

EBA's response singled out third-country multi-issuer stablecoin schemes as risks it rates "significant to very significant." It also proposed reviewing reserve rules for token issuers.

Where do the ECB and national central banks stand?

On September 22, the European Central Bank and the 27 national central banks asked the Commission to scrap the deposit requirement altogether. MiCA currently requires at least 30% of reserves to sit in bank deposits, rising to 60% for significant tokens.

The central banks want issuers instead to hold a minimum share of reserves in assets maturing within one to five working days. They also flagged crypto-asset classification as a challenge for companies and supervisors.

Unclear definitions cause avoidable costs and delays in product launches, the central banks wrote, undermining the competitiveness of the EU market.

What is ESMA asking for?

The European Securities and Markets Authority (ESMA) filed its own response on September 30, the final day of the consultation. ESMA proposed a new regulated service category for firms that give users access to DeFi protocols.

It also proposed clearer criteria for what counts as genuinely decentralized. ESMA further asked for powers to freeze crypto-assets, shut down fraudulent websites, and bar regulated firms from offering services linked to non-compliant stablecoins.

ESMA also requested binding authority over token classification — a power it currently lacks under MiCA's supervisory setup. Under the framework, national regulators can seek ESMA opinions on classification, but those opinions are non-binding.

ESMA stated MiCA gives investors "a solid baseline of protection," though it remains less comprehensive than the rules covering traditional financial instruments.

What happens next?

The responses will feed into the Commission's assessment, due to the European Parliament and Council by June 30, 2027. The Commission may attach a legislative proposal the market has already dubbed "MiCA 2."

The review comes less than two years after MiCA took full effect on December 30, 2024. The regulation's stablecoin provisions began six months earlier, on June 30, 2024.

Transitional arrangements for existing providers ran out in mid-2026. Since then, regulators have turned to areas the original framework barely touched: lending, borrowing, staking, and DeFi.

The market for regulated stablecoins under MiCA remains small. As of September 1, 2026, EBA reported 39 EMTs issued under the regulation and zero ARTs authorized.