EU Proposes Centralising Crypto Supervision by Granting Direct Powers to ESMA
The European Commission has proposed transferring direct supervision of crypto firms from national regulators to the European Securities and Markets Authority (ESMA) to harmonise implementation of the Markets in Crypto‑Assets (MiCA) framework across the 27 EU member states. The package gives ESMA direct powers over trading venues, central counterparties, central securities depositories and crypto-asset service providers, moving ESMA from a coordinator role toward an SEC‑style supervisor. The proposal responds to complaints from France, Austria and Italy about inconsistent MiCA enforcement and follows a critical ESMA peer review of Malta’s authorisation process. Industry groups warned that centralisation could slow decision-making, strain ESMA’s resources and complicate market access for new crypto and fintech entrants that rely on domestic supervisors and passporting. The wider December 4 package also targets cross-border trading and post‑trading frictions, seeks to improve passporting and relaxes parts of the DLT Pilot Regulation to ease distributed‑ledger testing. The measures must be negotiated and approved by the European Parliament and Council before taking effect. Traders should watch potential short‑term market uncertainty around EU‑licensed services and onboarding timelines, and monitor how ESMA operationalises new powers — resource constraints or stricter, harmonised enforcement could affect liquidity and access for EU crypto products.
Neutral
The proposal is primarily regulatory and institutional: it centralises supervision under ESMA and aims to harmonise MiCA enforcement across the EU. For crypto traders, that points to structural and compliance consequences rather than an immediate directional price driver for any specific token. Short term, the market may see increased volatility or access frictions as licences, passporting and onboarding processes are reviewed or reworked — this can reduce liquidity in some EU-listed products and create uncertainty for firms relying on national approvals. Medium to long term, harmonised rules and central supervision could improve legal clarity and cross‑border market integration, which may be positive for institutional participation and product standardisation. Industry concerns about operational capacity and slower decision‑making, however, could delay benefits and keep near‑term sentiment cautious. Overall, effects are mixed: potential short‑term disruption and uncertainty, with possible long‑term gains in market stability and access if ESMA is adequately resourced and executes efficiently.