The European Commission, which serves as the executive arm of the European Union (EU), has proposed transferring the oversight of cryptocurrency companies from individual countries to the bloc’s markets regulator in an effort to “fully integrate” EU financial markets.
This initiative aims to resolve the inconsistencies arising from various supervisory methods employed by the 27 member states and place supervision under the European Securities and Markets Authority (ESMA), as stated in a Thursday announcement.
The proposals require negotiation and approval by both the European Parliament and the European Council.
This decision comes in light of concerns that despite striving for a cohesive regulatory framework for cryptocurrencies through the Markets in Crypto-Asset (MiCA) regulation, the divergence between individual countries has been too pronounced for ESMA’s satisfaction. By consolidating oversight of crypto alongside other financial services, the commission believes it will enhance effectiveness.
“EU financial markets are still notably fragmented, limited in scope, and lack competitiveness, missing opportunities for economies of scale and efficiency improvements,” the commission remarked.
ESMA functions as the EU’s closest equivalent to the U.S. Securities and Exchange Commission (SEC), though its role is primarily focused on coordination rather than direct supervision. The effort to unify financial markets and hand over “direct supervisory competences” could be interpreted as a move towards making the regulator more comparable to an EU counterpart of the SEC.
