EU DeFi proposals could push users to riskier platforms, says Coinbase exec
Coinbase’s EU policy chief says applying suitability tests beyond crypto lending and borrowing could limit access and fragment liquidity.
European Union efforts to tighten oversight of decentralized finance (DeFi) could drive crypto users toward platforms offering fewer investor protections, according to Coinbase’s head of EU policy.
Roeland Van der Stappen told Cointelegraph that regulated crypto platforms could respond by limiting or dropping access to DeFi services.
“Rules designed to protect investors would end up pushing activity towards the places with the least protection,” Van der Stappen said.
In its September response to the European Commission’s consultation on the Markets in Crypto-Assets Regulation (MiCA), the European Securities and Markets Authority recommended creating a new category of regulated crypto services for firms that give customers access to DeFi protocols.
In September, the European Banking Authority (EBA) urged the Commission to study new rules for crypto lending and borrowing, including when regulated platforms give customers access to DeFi lending protocols. It listed suitability tests, which assess whether a service is appropriate for a customer, as one option in its consultation response.