European Union efforts to increase oversight of decentralized finance could direct crypto users toward platforms offering fewer investor safeguards, according to Coinbase's head of EU policy. Roeland Van der Stappen said regulated crypto-asset service providers (CASPs) might limit or withdraw DeFi access entirely in response to new rules.
Van der Stappen specifically warned against extending suitability tests beyond crypto lending and borrowing. Applying the same framework to a stablecoin swap as to leveraged lending ignores their differing risk profiles, he said. Lending, liquidity provision and on-chain swaps face the greatest exposure to such restrictions.
Fragmenting DeFi liquidity into smaller pools risks worsening prices for EU users and encouraging isolated, less regulated services. Such restrictions could steer users toward providers operating outside the EU with fewer safeguards, Van der Stappen said.
The European Securities and Markets Authority (ESMA) recommended in September creating a new category of regulated crypto services for firms providing customers access to DeFi protocols, as outlined in its response to the European Commission's Markets in Crypto-Assets Regulation (MiCA) consultation.
Separately, the European Banking Authority (EBA) urged the Commission in September to study new rules for crypto lending and borrowing, including suitability tests as an option when regulated platforms give customers access to DeFi lending protocols.
Van der Stappen advocated for a proportionate approach in which CASPs continue offering DeFi access with safeguards specifically matched to the activity being performed.
Data from an Adan-Ipsos survey of French crypto users found 49 percent preferred accessing DeFi through exchanges, while 14 percent favored personal wallets.
A Chainalysis report released Monday attributed a modest decline in crypto activity in Germany largely to decreasing decentralized exchange activity. Across the broader EU, crypto activity grew 2.2 percent in the 12 months through June 2026.
