EU’s Bold Move: ESMA Gains Crypto Control—What’s Next?

EU Proposes Centralized Crypto Oversight by ESMA

The European Commission is planning new rules to give ESMA more control over crypto firms. This shift aims to unify supervision across the EU.

Currently, national regulators oversee crypto companies. But the EU wants ESMA to take over. ESMAS chair, Verena Ross, says this will make supervision more consistent. the EU had earlier proposed this when drafting MiCA, but it wasn’t fully implemented.

Though, smaller EU countries like Malta and Luxembourg are against this. They fear losing regulatory independence and competitiveness. Malta,as an example,has granted five CASP licenses under MiCA,including to Crypto.com and OKX.

ESMA has criticized Malta’s licensing process,saying some risks weren’t properly assessed. Ross argues that having 27 different national supervisors is inefficient. A centralized approach would be more effective.

but not everyone agrees. Some smaller EU nations worry that ESMA’s control could harm their financial sectors. They fear a rigid, one-size-fits-all system that stifles innovation.

Luxembourg’s financial watchdog, CSSF, warns that centralizing supervision could create a “monster.” They believe the EU doesn’t want a European version of the U.S. SEC.