EU DeFi proposals could push users to riskier platforms, says Coinbase exec - Cryptonews.net
European Union efforts to tighten oversight of decentralized finance could push crypto users toward platforms with fewer investor protections, according to Coinbase's head of EU policy.
Roeland Van der Stappen, Coinbase's head of EU policy, warned that EU efforts to tighten oversight of decentralized finance (DeFi) could drive crypto users toward platforms offering fewer investor protections. Regulated crypto platforms might respond by limiting or completely dropping access to DeFi services.
Rules designed to protect investors would end up pushing activity towards the places with the least protection
Regulatory Response
In September, the European Securities and Markets Authority recommended creating a new category of regulated crypto services for firms providing customer access to DeFi protocols. Meanwhile, the European Banking Authority urged the Commission to study new rules for crypto lending and borrowing, including when regulated platforms give customers access to DeFi lending protocols.
Van der Stappen expressed concern that extending suitability tests to other DeFi services could treat simple stablecoin swaps the same as leveraged lending, despite their different risk profiles. He noted that lending, liquidity provision, and on-chain swaps would be most exposed, with some providers potentially narrowing offerings or withdrawing DeFi access.
Market Impact
The Coinbase executive warned that restricting access through regulated platforms could split DeFi liquidity into smaller pools, leaving EU users with worse trade prices. Such restrictions might encourage "walled gardens" and steer users toward providers outside the EU with fewer safeguards.
A 2026 Adan-Ipsos survey found that 49% of French crypto buyers preferred accessing DeFi through exchanges, compared with 14% who favored personal wallets. A Chainalysis report attributed a modest decline in crypto activity in Germany largely to decreasing decentralized exchange activity, though EU-wide crypto activity grew 2.2% in the 12 months through June 2026.
Van der Stappen advocated for "a proportionate approach" that would allow crypto-asset service providers to continue offering DeFi access with safeguards matched to the specific activity, rather than applying one-size-fits-all regulations.
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