The European Commission has launched a consultation on including DeFi vaults and crypto lending under MiCA regulation.
According to the announcement, a targeted consultation on the matter was opened on 20 May 2026, with stakeholder responses due by 30 September 2026. The review addresses gaps left by the original MiCA framework, which excluded crypto lending and, in part, fully decentralised activities from its scope.
MiCA, the EU's framework governing crypto-asset markets, did not originally extend to lending activities or to services considered fully decentralised. As the crypto lending and liquidity landscape has expanded, Brussels is now examining whether these exclusions leave oversight gaps, particularly around products that combine automated smart contract functions with elements of traditional lending. The consultation is intended to gather input from legal and industry stakeholders on how such products should be categorised and, potentially, regulated.
Vaults resist simple legal classification
A central challenge identified by legal experts is that EU law does not currently define a category for 'vaults'. According to Yuriy Brisov, a digital assets lawyer, lawyers must instead assess vaults by the functions they perform rather than by any existing label. DeFi vaults typically distribute economic functions, such as lending, across smart contracts and multiple participants. In the case of Morpho Vault V2, for example, these roles include owners, curators, allocators, and sentinels, each responsible for a different part of the vault's operation. This distributed structure makes it difficult to map a vault onto a single regulated entity, complicating supervision under a framework built around identifiable service providers.
Jonathan Galea, a partner at Cahill, has warned against treating 'DeFi lending' as a single, uniform category, noting that doing so risks applying a one-size-fits-all approach to products that differ structurally from one another. Moreover, Michael Egorov, founder of Curve, has argued that if DeFi lending is brought under regulation, it should be treated differently from traditional lending. In his view, DeFi products do not require the full set of safeguards applied to conventional lenders, though other forms of oversight may still be appropriate.
Implications for the DeFi ecosystem
The outcome of the consultation could shape how decentralised lending protocols operate within the EU, with implications for platforms that rely on multi-party governance structures rather than a single regulated operator. Given that responses are due by the end of September 2026, any resulting proposals are likely to take shape only after that deadline, leaving DeFi lending and vault providers operating under the current regulatory gap in the interim. The debate reflects a broader question facing regulators globally: whether decentralised finance products can be meaningfully supervised using frameworks designed for centralised financial intermediaries, or whether bespoke rules are required.
