The European Banking Authority (EBA) has urged the European to consider bringing crypto lending within the scope of MiCA, the EU's Markets in Crypto-Assets Regulation, as part of its review of the European Union's digital asset regulatory framework, according to a press release published by the EBA.

The recommendation extends to cases where crypto asset service providers give customers access to decentralized lending protocols — blockchain-based applications that connect lenders and borrowers without a central intermediary. According to the regulator, the sector can pose risks to consumers that are not fully addressed under the existing framework.

The EBA also called for stronger rules covering third country multi issuer stablecoin arrangements, in which a single stablecoin is issued by multiple legal entities based outside the EU. While it considers the existing requirements for asset-referenced tokens and electronic money tokens — the two stablecoin categories recognized under MiCA — broadly appropriate, the authority said these structures can create significant risks and may require changes to MiCA.

Reserve requirements for stablecoin issuers should likewise be reviewed, particularly the rules governing the minimum share of reserves that must be held as bank deposits, while maintaining effective risk management.

Separately, the EBA identified crypto asset classification as a major challenge. Unclear boundaries between MiCA and other EU financial rules can create unnecessary costs and delays for companies launching products, the regulator said, and it recommended clearer definitions and scope.

The authority further wants the reporting framework for token issuers and crypto service providers reviewed to improve supervision and risk monitoring.

MiCA entered into full application in December 2024, while its stablecoin provisions took effect six months earlier, in June 2024. As of September 1, 39 electronic money tokens had been issued under the framework, while no asset-referenced tokens had been authorized, according to the EBA.

The recommendations come as the European Commission conducts a broader review of MiCA to determine whether the rules remain fit for purpose as the crypto market develops. Its targeted consultation remains open through September 30 and could ultimately lead to legislative changes. Because MiCA applies uniformly across the EU's member states, any resulting amendments would affect crypto asset issuers and service providers throughout the bloc.