The European Union‘s financial regulatory body is preparing to supervise businesses dealing in cryptocurrencies.
Verena Ross, who leads the European Securities and Markets Authority (ESMA), mentioned that the European Commission is developing strategies to shift the regulatory oversight of crypto companies, clearing houses, and stock exchanges from individual nations to ESMA. This information was initially published by the Financial Times on Monday (October 6th).
According to the report, Ross stated that this transition aims to foster “a more unified and globally competitive European capital market.”
These proposed adjustments, facing resistance from smaller nations like Luxembourg and Malta, are intended to ensure that “we are addressing the continued fragmentation in markets and resolve that to create more of a single market for capital in Europe,” Ross explained, according to the account.
When crafting its groundbreaking Markets in Crypto-Assets (MiCA) Regulation, which took effect earlier this year, the EU initially considered positioning ESMA as the primary regulator for cryptocurrency service providers, including exchanges and digital currency custodians. The report detailed this.
However, this idea encountered scrutiny regarding ESMA’s ability to effectively manage such a role, potentially leaving the marketplace vulnerable at a country-by-country level. Ross argued this current decentralized approach lacks efficiency, as noted in the report.
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Back in July, ESMA raised concerns about Malta’s crypto licensing procedures within the EU, suggesting that “some risks areas were not adequately assessed during the authorization process” for an unspecified business, as per the report.
“We dedicate considerable effort to ensuring a consistent MiCA implementation, but this requires substantial collaboration between ourselves and the national supervisors,” Ross commented, based on the report.
“Moreover, this implies replicating the development of specialized resources and expertise across 27 national supervisory bodies, which would be more streamlined if managed centrally at the European level,” she added, according to the report.
Her remarks follow the recent appeals from three European regulators — France’s Autorité des Marchés Financiers (AMF), Italy’s Consob, and Austria’s Financial Markets Authority — urging ESMA to assume oversight of major crypto operations.
In related cryptocurrency regulatory developments, the European Systemic Risk Board advocated last week for reinforced regulations concerning “multi-issuer” stablecoins, referring to those issued both within the EU and in other international territories.