The European Commission has decided to entrust the supervision of crypto companies and their activities to the sole jurisdiction of the European Securities and Markets Authority (ESMA). This decision will end the application of different regulatory styles in several Member States operating under the regime European regulation of crypto-asset markets (MiCA).
ESMA’s single crypto authority to boost competitiveness and innovation – CE
In an announcement published on Thursday, the European Commission, the executive body of the European Union (EU), rolled out a series of regulatory measures aimed at creating a single market for financial services. This initiative aims to create a competitive, innovative and efficient financial system that provides EU citizens with better options for wealth growth and business financing.
A statement from the announcement read:
Further integration of financial markets is not an end, but a means to create a single financial services market greater than the sum of its national parts. Simplified access to capital markets reduces costs and makes markets more attractive for investors and businesses from all Member States, regardless of their size.
In particular, the EC’s new regulatory package will place the supervision of crypto-asset service providers (CASPs), among other business groups, under the sole authority of ESMA. Interestingly, the EC’s recent decision comes just three months after market authorities in France, Austria and Italy pushed for a stronger European framework for cryptocurrencies, citing major differences in the implementation of MiCA regulations in each country.
Currently, crypto regulation across the 27 EU member states operates under the MiCA, resulting in a patchwork of national approaches that the EC believes hinder competition and efficient cross-border operations. The single ESMA regime aims to eliminate these divergences in order to provide a more integrated European financial market.
The EC stated:
Improvements in the supervisory framework are closely linked to the removal of regulatory barriers. This package aims to address inconsistencies and complexities linked to fragmented national approaches to supervision, making surveillance more effective and conducive to cross-border activities, while responding to emerging risks.
Alongside the new single regime, the European Commission has also expressed its intention to create a favorable environment for the adoption of distributed ledger technology, for example blockchains, to stimulate innovation in the financial sector. However, all these regulatory changes remain subject to negotiation and approval by the European Parliament and the European Council.
Crypto Market Overview
At the time of writing, the total crypto market cap is valued at $3.04 trillion, following a slight loss of 0.25% over the past day. Meanwhile, the total trading volume is valued at $135.47 billion.
Featured image from Shutterstock, chart from Tradingview
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