European Union efforts to increase oversight of decentralized finance could drive users to platforms offering fewer investor protections, according to Roeland Van der Stappen, Coinbase's head of EU policy. Van der Stappen said that regulated crypto platforms could respond by limiting or dropping access to DeFi services.
Rules designed to protect investors would end up pushing activity toward platforms with the least protection, Van der Stappen said. This assessment comes as the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) both recommended tighter oversight measures.
In its September response to the Markets in Crypto-Assets Regulation (MiCA) consultation, ESMA suggested a new category of regulated crypto services that would apply to firms providing customers access to DeFi protocols.
The EBA urged the European Commission in September to study new rules for crypto lending and borrowing, including situations where regulated platforms facilitate access to DeFi lending protocols. The EBA's consultation response listed suitability tests—which assess if a service is appropriate for a customer—as a potential option.
Van der Stappen warned that extending suitability tests beyond crypto lending and borrowing could treat a simple stablecoin swap identically to leveraged lending, despite their differing risk profiles. He identified lending, liquidity provision, and on-chain swaps as the activities most exposed to potential restrictions.
Some crypto-asset service providers may narrow their offerings or withdraw DeFi access entirely under such rules. Van der Stappen advocated for a proportionate approach, allowing service providers to offer access with safeguards specifically matched to the activity.
Restricting access through regulated platforms could split DeFi liquidity into smaller pools, leading to worse prices on trades for EU users. This scenario could also encourage isolated DeFi services and direct users toward non-EU providers that operate with fewer safeguards.
A 2026 Adan-Ipsos survey found that 49 percent of French crypto buyers preferred accessing DeFi through exchanges, compared to 14 percent who favored personal wallets.
A Chainalysis report released Monday noted a modest decline in crypto activity in Germany, largely attributable to decreasing decentralized exchange activity. Across the entire EU, crypto activity grew 2.2 percent in the 12 months through June 2026.
