EBA sets MiCA review priorities for EU crypto regulation

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EBA MiCA review priorities

Highlights

EBA advises the European Commission to amend MiCA regarding third-country multi-issuer schemes and review reserve requirements due to elevated risk levels.
EBA highlights persistent classification uncertainties under MiCA, citing increased costs, product launch delays, and weakened EU market competitiveness as consequences.
EBA urges regulation of crypto-asset lending, including decentralised protocols, and calls for revised reporting to strengthen supervision and consumer protection.

Regulatory priorities for the MiCA review

As reported by the European Banking Authority, its response to the European Commission's targeted consultation says the current MiCA framework is broadly appropriate for issuers of asset-referenced tokens and electronic money tokens. However, the authority recommends possible regulatory changes for third-country multi-issuer schemes, which it says pose significant to very significant risks, and calls for a review of reserve requirements while preserving effective risk management.

The EBA also says the classification of crypto-assets under MiCA remains a challenge for both firms and supervisors. It argues that uncertainty over scope and definitions creates avoidable costs and delays in product roll-out, which in turn impedes innovation and weakens the competitiveness of the EU market.

Market impact and supervision focus

The authority is also encouraging the European Commission to consider regulation for crypto-asset lending, including cases where crypto-asset service providers facilitate access to decentralised lending protocols. It says such activity raises consumer protection concerns that warrant closer oversight.

The EBA further recommends a review of the reporting framework for issuers and crypto-asset service providers to improve supervision and risk monitoring across the sector. It says it will continue supporting the Commission's MiCA review with the aim of maintaining a robust, proportionate and future-proof framework for the EU crypto-asset market.

Our earlier article examined the European Banking Authority’s warning that fragmentation in the EU banking market is limiting banks’ ability to finance the bloc’s key transitions, from digitalisation to defence and economic security. We noted that differences in tax, insolvency and consumer-protection rules raise costs, curb cross-border lending and push more funding toward non-bank players, while the EBA also signalled support for simplifying rules to keep European lenders competitive without weakening resilience.

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