At a glance
- What changed
- Aave submits policy recommendations.
- Who it affects
- European users and providers.
- When
- Published September 30, 2026.
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Aave asks for a distinction between holding and lending
Aave Labs published its EU crypto-policy response on September 30, 2026, asking policymakers to preserve returns paid by stablecoin borrowers. Stablecoins are tokens intended to track a reference value, commonly a currency. Aave argues that lending them involves the risk of borrower losses and delayed withdrawals, unlike simply holding them. The distinction matters to Europeans using blockchain lending markets and businesses building access to them.
Its broader position favors regulating people who control financial services, rather than licensing open-source software. It also supports self-custody, where users control their own assets, and clearer ownership rules for assets represented by tokens and used to secure loans. These are Aave’s policy requests.
[1]The consultation has closed; a rule change remains conditional
MiCA is the EU’s Markets in Crypto-Assets Regulation. The European Commission opened its targeted review consultation on May 20 and extended the deadline to September 30, 2026, at 23:59 CEST. The official page now marks it closed. Its intended respondents included crypto businesses, issuers, supervisors, central banks and finance ministries. This was a specialist evidence-gathering process, rather than an application for an individual savings product.
The Commission says responses will inform reports required by Articles 140 and 142. A legislative proposal may accompany that work if warranted. That sequence is important: collecting recommendations, evaluating them and proposing legislation are separate stages. Publication of a submission therefore does not itself establish a new entitlement to earn yield. It is not an Aave enrollment window or fee update.
[2]What the Commission is actually asking
The Commission’s questionnaire describes the existing prohibition on stablecoin interest under Articles 40 and 50 and asks whether it should change. It separately asks how crypto lending and borrowing should be regulated. These questions explain why the source of a payment matters in the debate: remuneration associated with a token and payment for a lending activity are being examined through related, but distinct, policy questions.
The document defines decentralized finance, or DeFi, as blockchain software offering financial functions, while acknowledging that the term also describes systems with identifiable controllers. It cites MiCA’s exclusion for fully decentralized services without an intermediary. Questions then explore control over software upgrades, concentrated governance, custody and possible certification. That is an inquiry into how to draw the boundary. The questionnaire explicitly says it is neither a final Commission position nor a formal proposal.
[3]The banking regulator wants additional safeguards assessed
The European Banking Authority, or EBA, took a different approach in its September 24 response. It supports retaining the stablecoin-interest prohibition and says lending can create opportunities to earn yield where issuers and service providers cannot offer interest. Its concern is regulatory arbitrage: similar economic activity receiving different treatment because it is structured differently. This is the authority’s assessment, not a finding that every lending arrangement breaches MiCA.
The EBA recommends a cost-benefit analysis of adding intermediated lending and borrowing to regulated services and setting requirements for firms that provide access to DeFi lending. Options include checks on whether a product suits a customer, limits on borrowing, disclosures and protocol certification. It identifies practical information gaps concerning fees, yields, collateral changes, provider actions and customer rights. For readers, those details explain why a displayed return is only one part of the policy question: access conditions, potential losses and the information supplied before participation also matter.
[4]The market regulator focuses on access and disclosure
The European Securities and Markets Authority, or ESMA, published its own recommendations on September 30. It wants clearer criteria for determining when an activity is genuinely decentralized and a new regulated service covering firms that give customers access to DeFi protocols. This would focus attention on the business providing the route into a protocol, as well as on the underlying software.
ESMA also proposes proportionate requirements for lending and borrowing, including clearer information about costs, risks, rewards, collateral and possible losses. Its recommendations include tighter marketing rules and more transparent charges. These proposals help locate the practical stakes for users: what a service must explain, which business has obligations, and how an advertised return is presented. They remain recommendations submitted to the Commission. Readers should therefore distinguish the debate over future access rules from any claim that this review has already changed an existing account’s terms.
[5]Separate the stages of the review
Highlight a stage; explanations remain visible.
| Case | What it means |
|---|---|
| Consultation | Evidence received The Commission’s consultation is closed. Responses inform its review. |
| Recommendations | Possible safeguards The EBA proposes assessing safeguards for lending and firms providing DeFi access. |
| Legislation | A conditional next step A Commission legislative proposal may follow; the consultation itself is not one. |
- The targeted consultation is closed.
- The EBA recommends assessing lending safeguards.
- ESMA proposes regulating access providers.
Official sources & further reading
Independently written from the primary sources below. Checked on 1 October 2026.
- Aave Labs policy response ↗Announcement · 30 September 2026
- Commission consultation status ↗Documentation · 20 May 2026
- Commission targeted MiCA questionnaire ↗Documentation · 20 May 2026
- EBA response to the MiCA review ↗Documentation · 24 September 2026
- ESMA proposals for the MiCA review ↗Documentation · 30 September 2026
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