MiCA is coming for DeFi vaults, but regulation will be difficult

MiCA left crypto lending outside its original rulebook — but now Brussels is considering whether to bring it in.

On May 20, 2026, the European Commission asked stakeholders to weigh in on areas left outside the original Markets in Crypto Assets (MiCA) framework. These include issues around decentralized finance (DeFi) and crypto lending and borrowing.

One area of contention involves lending vaults, which can channel billions of dollars into onchain credit markets without looking like conventional lending. Their legal status currently depends on non binding interpretations that they fall outside of MiCA and EU fund rules.

Yuriy Brisov, an EU digital assets lawyer and partner at Digital & Analogue Partners, tells Magazine the law pertaining to vaults at present is unclear:

“EU law has no category called a ‘vault.’ A lawyer therefore defines it the way a regulator would qualify it: by function, not by label.”

That’s just one of myriad regulatory problems, since vaults can perform the economic functions of lending while spreading other functions over smart contracts and multiple participants rather than a single company.

If Brussels decides lending should come inside the regulatory perimeter, what does that mean for DeFi, and where does it leave the people and protocols behind these vaults?