EU Pushes To Centralise Region’s Crypto Oversight Under European Securities and Markets Authority (ESMA)

The European Commission is driving a major shift in the region’s crypto oversight with a new proposal that would grant ESMA direct supervision of all crypto service providers across the Union.

The proposal marks a sharp departure from the oversight structure established under the landmark Markets in Crypto-Assets (MiCA) framework and could introduce significant legal uncertainty.

Centralising Crypto Regulation

The European Commission, the EU’s executive arm, is pushing for its markets regulator, ESMA, to take over supervision of all crypto businesses operating within the region. According to Bloomberg, draft plans circulated by EU officials ahead of an expected announcement in December recommend that all crypto service providers be placed directly under ESMA’s oversight. In addition to supervisory powers, ESMA would also be responsible for authorising new businesses. 

The proposal aims to increase regulatory control over major crypto exchanges and address rising concerns related to security and money laundering.

Potential Disruption to the MiCA Framework

Regulatory oversight in the EU is currently governed by MiCA. Under the framework, crypto firms licensed in one EU member state may offer services across the bloc, with national regulators overseeing local market activities — a process known as “passporting.”

The European Commission’s draft proposal, however, would centralise this oversight by giving ESMA direct supervisory authority over all crypto service providers in the region, including those already licensed under MiCA. While the draft reportedly allows ESMA to delegate some tasks to national regulators, their responsibilities would be significantly reduced.

MiCA has been years in the making, and its rollout is nearing completion. Robert Kopitch, secretary-general of Blockchain for Europe, told Bloomberg:

Kopitch also noted that national regulators maintain closer relationships with crypto service providers — something a central authority such as ESMA may struggle to replicate.

The proposal remains in draft form and will require approval from the European Parliament and the Council of Member States before any implementation can take place.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.