The European Commission is drafting regulatory reforms to grant the European Securities and Markets Authority (ESMA) direct supervisory authority over cryptocurrency companies, shifting oversight from national regulators to a centralized EU body. This move, reported by the Financial Times, aims to unify the capital markets under the Markets in Crypto-Assets (MiCA) framework and address fragmentation issues. ESMA Chair Verena Ross emphasized that decentralized supervision has led to inefficiencies, stating, "It also means that people had to build up specific new resources and expertise 27 times in different national supervisors, which could have been done more efficiently once at a European level."
The proposal, which also covers stock exchanges and clearinghouses, has faced backlash from smaller EU states like Malta, Luxembourg, and Ireland. These nations fear losing regulatory autonomy and competitiveness, with Malta having granted at least five CASP licenses under MiCA, including to exchanges like Crypto.com and OKX. In July 2025, ESMA criticized Malta's licensing process, alleging inadequate risk assessment. Claude Marx, head of Luxembourg's financial regulator, warned that centralizing power at ESMA could create a "monster" and stifle innovation.
Historically, ESMA was established in 2011 to harmonize market rules, but most financial activities remain under national authorities. The European Commission is evaluating the formal proposal, with ESMA set to supervise consolidated equity and bond price tapes and ESG ratings from 2026. Ross highlighted the need for integrated markets to support EU goals in defense, green energy, and digital infrastructure.