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The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) have released a joint report analyzing crypto-assets, decentralized finance (DeFi), and related activities for the European Union Commission's Markets in Crypto-Assets Regulation (MiCAR). The announcement was made in a press release on January 16.
According to the EBA and ESMA report, DeFi accounts for 4% of the global crypto-asset market. While EU adoption exceeds the global average, it still trails behind countries such as the United States and South Korea. The report notes a correlation between DeFi hacks, stolen assets, and market size. It identifies risks of money laundering and terrorist financing linked to decentralized exchange flows, which represent 10% of global spot crypto trading volumes.
Regarding crypto lending, borrowing, and staking, the report highlights limited participation by EU consumers and financial institutions. Risks include excessive leverage, information gaps, and systemic issues such as re-hypothecation and interconnectedness. Although no immediate financial stability risks have been identified, these findings contribute to the European Commission’s regulatory review under MiCAR.
