According to Bloomberg, France is urging the European Union’s top markets regulator to take a bigger role in overseeing major cryptocurrency companies as digital asset activity grows across the bloc.
Bank of France Governor François Villeroy de Galhau on Thursday called on the European Securities and Markets Authority (ESMA) to directly supervise major crypto companies operating within the EU. He argued that centralizing supervision would ensure consistent application of rules and reduce regulatory fragmentation, according to Bloomberg.
Villeroy also advocated strengthening the EU’s existing framework for digital assets, known as MiCA, which allows crypto companies licensed in one member state to operate in all 27 countries under a “passport” system. His comments come amid growing tensions over stablecoin regulation, with the European Central Bank apparently backing restrictions on stablecoins issued both within the EU and abroad – a stance that could affect major issuers such as Circle Internet Group Inc. and Paxos Inc.
“This framework would benefit from much stricter regulation of multiple issuances of the same stablecoin within and outside the European Union, to reduce arbitrage risks in times of stress,” Villeroy said.
Related: White House selects candidate to lead CFTC after crypto investors raise concerns
According to Bloomberg, Circle has become Europe’s largest stablecoin issuer, leveraging EU MiCA rules to support its $76 billion USDC token. The company, which obtained an e-money license in France last year, uses a multi-issuance model requiring issuers to maintain reserves in at least one EU state while continuing to manage similar tokens elsewhere.
Industry groups have warned that uncertainty over the EU’s position on this model could disrupt operations. In an October 6 letter to European Commissioner Maria Luís Albuquerque, trade associations including Blockchain for Europe, the Electronic Money Association and the Digital Euro Association warned that revising the multi-emissions framework could harm Europe’s competitiveness.
“Reopening this established concept – the only route for global stablecoins that make up 99% of the market – risks leaving Europe falling behind,” the groups said in the letter seen by Bloomberg.
Source: Bloomberg
