TLDR
- ECB supports an EU plan to give ESMA direct oversight of major crypto firms.
- The plan covers large CASPs, trading venues, clearinghouses, and securities depositories.
- ECB said big crypto firms can become systemically relevant across the EU.
- ECB warned ESMA needs more staff and funding for the expanded role.
- Ireland, Luxembourg, and Malta have raised concerns about the proposal.
The European Central Bank has backed an EU move to centralize crypto oversight under ESMA. The plan would shift supervision of major crypto firms from national regulators to one EU authority. It marks a new step in the bloc’s effort to tighten oversight under MiCA. The focus is now on major crypto firms operating across Europe.
ECB backs central oversight for major crypto firms
The ECB said it “fully supports” the European Commission’s plan to expand ESMA’s powers. Reuters reported that the ECB issued its opinion on April 9. The proposal would give ESMA direct oversight of the largest cross-border financial firms.
The plan also covers crypto asset service providers, trading venues, and clearinghouses. It would move supervision away from national regulators in some cases. ESMA would become the main watchdog for the biggest firms.
The ECB said large crypto firms can become “systematically relevant” over time. It said unified oversight can help contain risks to the wider financial system. That includes risks that could spread into banking activity.
Why the proposal matters under MiCA
MiCA became fully applicable for crypto asset service providers at the end of 2024. Under that system, national authorities handled direct supervision. ESMA mainly coordinated work across the bloc.
The Commission’s plan would change that structure for the largest firms. It would create direct EU-level supervision for major cross-border players. That would be one of the biggest changes since MiCA took effect.
The ECB also linked the plan to wider EU market goals. It said a more integrated financial system can reduce fragmentation. It added that deeper markets can support monetary policy transmission.
The central bank asked for a non-voting seat on ESMA’s executive board. It said this would let it provide technical input. That input would cover payment systems and monetary policy.
Resource concerns and political resistance remain
The ECB backed the proposal, but it also raised operational concerns. It said ESMA would need more staff and funding. It also recommended a phased handover from national regulators.
That step, the ECB said, would reduce disruption during the transition. The opinion noted that a sudden shift could create practical challenges. It said the process should move in stages.
The proposal has also met resistance from some member states. Ireland, Luxembourg, and Malta have expressed concerns about the shift. These countries have become key licensing hubs for crypto firms under MiCA.
Several major firms secured EU approvals through those jurisdictions. Coinbase received its license through Luxembourg. OKX and Gemini used Malta, while Kraken expanded through Ireland and Cyprus.
ESMA has already warned that the EU is not a place for “forum-shopping.” The ECB’s backing does not make the plan final. The proposal now moves into talks with EU member states and the European Parliament.
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