EBA and ESMA report on recent developments in crypto-assets

In January, we published a report with ESMA that analyses recent developments in the crypto-assets market, specifically focusing on decentralised finance (DeFi) and crypto lending, borrowing, and staking. This analysis contributes to the European Commission’s upcoming report to the European Parliament and Council, as required by Article 142 of MiCAR.

The report provides an in-depth look at the DeFi landscape, identifying key risks such as ICT vulnerabilities and the potential for money laundering and terrorist financing (ML/TF). It also examines the business models and associated risks in the crypto lending, borrowing, and staking markets, noting challenges such as information asymmetries and systemic risks.