The European Commission, the executive body of the European Union (EU), has proposed ending individual country supervision of cryptocurrency companies and transferring responsibility to the bloc’s markets regulator as part of moves to “fully integrate” the EU’s financial markets.
The commission wants to address discrepancies resulting from different supervisory approaches between the 27 member states and transfer supervision to the European Securities and Markets Authority (ESMA), it said in a statement on Thursday.
The proposals must be negotiated and approved by the European Parliament and the European Council.
The move follows concerns that, despite aiming to achieve a unified regulatory environment for crypto under the Markets in Crypto-Assets (MiCA) framework, different countries were diverging too much for ESMA’s liking. Bringing oversight of crypto and other financial services under one agency will be more effective, he said.
“EU financial markets remain highly fragmented, small and lack competitiveness, failing to benefit from potential economies of scale and efficiency gains,” the commission said.
Regulators in some countries, such as France’s AMF, Austria’s FMA and Italy’s Consob, have raised concerns and asked ESMA to take tighter control over MiCA in September.
ESMA is the closest European equivalent to the Securities and Exchange Commission (SEC) in the United States. However, the role of ESMA is more that of coordination than that of direct supervision exercised by the SEC. The decision to integrate financial markets and transfer “direct supervisory powers” could be seen as a step towards bringing the regulator closer to an equivalent of the EU’s SEC.
