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08/23/2026

EU Opens MiCA Review for DeFi Lending Vaults, Regulatory Path Unclear

What happened: The European Commission launched a targeted review of the Markets in Crypto-Assets (MiCA) framework on May 20, 2026, focusing on DeFi lending and borrowing protocols not covered by the

EU Opens MiCA Review for DeFi Lending Vaults, Regulatory Path Unclear

What happened: The European Commission launched a targeted review of the Markets in Crypto-Assets (MiCA) framework on May 20, 2026, focusing on DeFi lending and borrowing protocols not covered by the original regulation. The consultation, open until September 30, 2026, highlights the complexity of regulating decentralized vaults, such as those built on Morpho's Vault V2 architecture, which distribute control across multiple roles and smart contracts.

Why it matters: The review signals that EU regulators are grappling with how to classify and potentially regulate DeFi lending, which currently falls outside MiCA if fully decentralized. Legal experts note that EU law lacks a "vault" category, making functional analysis essential. The outcome could determine whether DeFi vaults remain unregulated, get added to MiCA, or require a new regime—potentially reshaping the European DeFi landscape.

Source: Cointelegraph Magazine