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Crypto Journalist
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The European Commission is pushing for a major overhaul of Europe’s crypto rulebook, proposing that the European Securities and Markets Authority (ESMA) become the direct supervisor of every crypto business operating in the bloc.
Key tips:
- The European Commission wants ESMA to directly supervise all crypto companies, replacing MiCA’s national regulator model.
- Industry groups warn the change could disrupt MiCA’s rollout and create legal uncertainty.
- Critics say that ESMA lacks the resources and proximity to companies to take over the responsibilities of national supervisors.
The plan, outlined in draft documents circulated ahead of an announcement expected next month, will mark a sharp departure from the oversight model established under the EU’s flagship Markets in Crypto-Assets (MiCA) framework, Bloomberg said. reported on Friday.
The Brussels Plan Will Transfer MiCA Approvals from National Watchdogs to ESMA
Under MiCA, crypto companies must secure authorization in an EU member state before offering services in the bloc through “passporting.”
National regulators have spent years preparing this structure, with the window for full implementation closing next year.
The new proposal from Brussels, however, would transfer much of that authority to ESMA, including the power to approve new entrants.
The Commission’s draft says that ESMA could delegate some functions to national authorities, but the general change will significantly dilute its role.
Any change would also need approval from the European Parliament and the Council. Officials declined to comment on ongoing discussions.
Industry groups warn that the move risks destabilizing the regulatory environment just as MiCA has been launched.
“Reopening MiCA at this stage would introduce legal uncertainty, risk delaying the authorization process, and divert attention and resources from the practical task of consistent implementation,” Robert Kopitsch, Blockchain’s general secretary for Europe, told Bloomberg.
He noted that national watchdogs maintain closer daily contact with companies, something that ESMA cannot easily replicate.
Kopitsch added that any future push towards a centralized model should come only after “concrete experience and evidence gathered from the first years of MiCA implementation”.
Others have raised concerns about the timing. Andrew Whitworth, founder of Global Policy Ltd., said that crypto markets could serve as a useful testbed for a more centralized regime, but that the shift in responsibility now would be disruptive.
ESMA, he added, would need a big boost in resources to take on the workload currently held by national supervisors.
France leads EU push to expand ESMA powers amid pushback from member states
Last month, France urged the European Union gives ESMA direct authority over large cryptocurrency firms operating throughout the block.
At the time, Bank of France Governor François Villeroy de Galhau said the move would ensure consistent oversight and enforcement of crypto regulations under the MiCA framework.
He warned that the current system, which allows companies to obtain licenses from individual member states and “passport” across the EU, risks regulatory loopholes and uneven oversight.
ESMA President Verena Ross hinted earlier this year that centralized supervision may ultimately be more effective.
With 27 national regulators preparing separately for MiCA, he said: “There is always a period where you can say: does it make more sense – for efficiency and to have a cross-border view – to do it in a central point?”
In July, ESMA also raised concerns about Malta’s crypto licensing processfollowing a peer review by the Malta Financial Services Authority (MFSA).
