France has urged the European Union to give its main markets regulator, the European Securities and Markets Authority (ESMA), direct authority over major cryptocurrency companies operating across the bloc.
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France wants the EU’s main markets regulator, ESMA, to directly supervise big crypto companies.
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Bank of France Governor François Villeroy de Galhau has called for tighter control of stablecoins.
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The proposal comes as part of EU efforts to centralize supervision and strengthen financial stability.
Speaking on Thursday, Bank of France Governor François Villeroy de Galhau said the move would ensure consistent oversight and enforcement of crypto regulations under the EU’s Markets in Crypto-Assets (MiCA).
He warned that the current system, which allows companies to obtain licenses from each member state and “passport” them across the EU, risks creating regulatory gaps and uneven oversight.
“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,” he said.
The comments come as the European Central Bank gains support to restrict cross-border issuance of stablecoins, which could potentially create conflict with issuers such as Circle and Paxos, which currently operate under MiCA’s multi-issuance provisions.
Circle, the issuer of USDC, Europe’s largest dollar-pegged stablecoin, relies on this model to manage tokens based in the EU and abroad.
The company obtained an e-money license in France last year, positioning the country as a hub for its European operations.
Stablecoins are considered essential to digital finance, but they also pose systemic risks if not properly supported.
Under MiCA, licensed issuers must hold reserves in at least one EU country, but can simultaneously issue equivalent tokens abroad, a structure that France says now requires stricter oversight to protect financial stability and prevent market fragmentation.
As reported, the European Commission is preparing sweeping changes that could hand direct supervisory authority over exchanges, cryptocurrency companies and clearing houses to the EU’s market watchdog, ESMA.
Verena Ross, president of ESMA, told the Financial Times that the proposed changes aim to resolve persistent fragmentation within the EU financial sector and create a more unified capital market.
“This would provide an essential boost to the creation of a more integrated and globally competitive capital market in Europe,” she said.
