The European Central Bank backs the European Commission’s plan to hand direct oversight of major EU crypto firms to ESMA.
The European Central Bank published an official opinion on Friday expressing full support for the European Commission’s plan to transfer supervision of major crypto firms from the current national framework to ESMA (European Securities and Markets Authority), the EU’s financial markets regulator. The opinion is non-binding, but represents a significant political signal for a process set to become the most substantial revision of Europe’s crypto regulatory framework since the introduction of MiCA.
In the document, the ECB states that the proposals “represent an ambitious step towards deeper capital market integration and financial supervision within the Union.” The Frankfurt-based institution comes out in favour of transferring authorisation, monitoring and enforcement powers for all CASPs (crypto-asset service providers) from national regulators to ESMA, with the goal of “ensuring supervisory convergence, reducing fragmentation and mitigating cross-border risks in crypto-asset markets.”
Under the current MiCA framework, CASPs can operate across the entire EU by obtaining a licence from a single member state, with ESMA setting only certain standards and guidelines. This system has prompted many firms to select favourable jurisdictions: Kraken established its European headquarters in Ireland, Coinbase and Bitstamp chose Luxembourg, Bitpanda opted for Austria while its asset management arm selected Germany. MiCA for CASPs entered into force in December 2024.
Some countries have opposed the plan. Malta, one of the most popular MiCA licensing hubs, described the proposal as premature, stressing that the CASP framework has only been in force for a few months. The ECB, however, argues that centralising supervision is also necessary because traditional banks are increasingly interconnected with crypto firms – either offering crypto services to clients or acting as operational partners – an interconnection that the institution warns could transmit “shocks through the financial system” in the event of a sector-wide crisis.
The ECB noted that, in order to take on responsibility for direct supervision of CASPs, ESMA will need to be provided with adequate financial resources and staff. The plan is still far from becoming law: European institutions – Parliament, Commission and national governments – will need to negotiate the proposal before it can be formally adopted, a process expected to take several more months.
