Key Takeaways
- Aave’s Stani Kulechov criticized EU MiCA proposals that could restrict stablecoin yield and DeFi access.
- EBA and ESMA ideas could push Europe toward tighter DeFi gateways, tests, and protocol certification.
- The key test is whether post-Sept. 30 MiCA changes preserve open DeFi or favor approved access points.
MiCA Review Puts DeFi Access in Focus
Aave founder Stani Kulechov is warning that Europe risks regulating the openness of decentralized finance.
Kulechov shared an X thread on Friday expressing his disappointment with positions emerging from the European Central Bank (ECB) and European Banking Authority (EBA) during the EU’s review of the Markets in Crypto-Assets regulation (MiCA).
His concern centers on proposals that could restrict stablecoin yield and impose new requirements when regulated crypto firms connect customers with DeFi.
“If regulators determine which protocols are deemed suitable for European users, the result risks looking very different from the open DeFi that exists today,” Kulechov said.
The proposals remain recommendations, not adopted EU rules. The European Commission’s MiCA consultation closed Sept. 30 and could inform future legislative changes.
Europe Considers Suitability Tests and DeFi Certification
Kulechov’s criticism reflects proposals actually under consideration.
The EBA has recommended studying rules for crypto firms that facilitate access to DeFi lending. Potential measures include suitability tests, leverage limits, additional disclosures and even certification of DeFi lending protocols. It also raised the possibility of restricting access to lending involving stablecoins that lack required MiCA authorization.
The European System of Central Banks, which includes the ECB, has meanwhile argued that restrictions on stablecoin remuneration should cover indirect returns generated through lending, borrowing and staking.
Kulechov argues such measures could fragment liquidity and create regulated gateways around networks designed to remain permissionless.
Morpho Shares Concerns Over DeFi Restrictions
Morpho has taken a similar, though more qualified, position.
Morpho Global Head of Policy Affairs Faustine Fleuret said the protocol welcomed the principle that regulatory obligations should focus on identifiable actors and access points rather than decentralized code itself.
But it opposed extending stablecoin remuneration restrictions to DeFi yield, mandatory protocol certification and the creation of a separate MiCA service specifically for DeFi access.
The broader regulatory debate is becoming increasingly consequential as lending, stablecoins, and tokenized securities migrate onchain.
Circle and Hyperliquid Push Alternative Approaches
Other major crypto companies are also pressing for changes.
Circle wants Europe to preserve multi-issuance structures for global stablecoins and reconsider rigid bank-deposit requirements for reserves.
The Hyperliquid Policy Center has argued that perpetual futures should remain within existing MiFID II derivatives rules rather than trigger an entirely new regulatory framework.
The fight is therefore no longer about whether Europe regulates crypto, as MiCA already does that. The question is whether its next iteration allows open DeFi to connect with regulated finance, or pushes European users toward a narrower collection of approved gateways.
Kulechov’s verdict on where the technology ultimately goes was considerably shorter: “DeFi will win.”
