European regulation tightens on DeFi structures
Brussels is actively reviewing whether crypto lending activities should fall under the Markets in Crypto Assets Regulation (MiCA), according to Cointelegraph. The regulatory examination raises questions about how to classify and govern decentralized finance vaults that operate without traditional institutional intermediaries.
The core challenge for regulators is structural: DeFi lending vaults make it difficult to identify which entity or participant should bear regulatory responsibility. Unlike traditional finance where a licensed lender can be clearly designated, decentralized protocols distribute functions across smart contracts and dispersed participants, complicating enforcement and supervision under MiCA's framework.
