EU Crypto Regulations Struggle to Balance Centralized Oversight with Regional Knowledge
- EU Commission proposes centralizing crypto oversight under ESMA, replacing MiCA's national regulator model and sparking industry concerns over legal uncertainty and implementation delays. - Critics warn centralized control risks destabilizing MiCA's 2026 rollout, with national regulators arguing they maintain closer firm engagement and ESMA requiring significant resource boosts. - France and ESMA Chair Verena Ross support centralization for regulatory consistency, but timing concerns persist as national
The European Commission is advocating for a major transformation in how cryptocurrencies are regulated across the EU, suggesting that the European Securities and Markets Authority (ESMA) should take on direct supervision of all crypto businesses within the union. This would move away from the current Markets in Crypto-Assets (MiCA) system, which relies on national regulatory bodies,
At present, MiCA requires crypto companies to obtain approval in one EU country, allowing them to operate throughout the bloc using a "passporting" mechanism. National authorities have spent years preparing for this approach, with the transition period ending in 2026.
Industry stakeholders have voiced significant concerns. Robert Kopitsch, secretary general of Blockchain for Europe,
This initiative is part of a broader push by EU lawmakers to unify oversight of financial markets, such as extending ESMA’s jurisdiction over clearing entities and trading platforms.
Nonetheless, critics argue that the timing of this proposal is problematic. National regulators are already dealing with the challenges of putting MiCA into practice, and transferring duties to ESMA might slow down approvals and make compliance more difficult for companies. In July 2025,
The proposal, which remains in draft status, still needs the backing of both the European Parliament and the Council of member states. If enacted, it could represent a significant change in how the EU manages financial regulation, aiming to balance centralized control with the need for local adaptability. For now, the discussion highlights the ongoing struggle between achieving regulatory efficiency and addressing the complex realities of a diverse and high-risk sector.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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