European Commission seeks expanded powers for financial regulator
I think this is one of those regulatory moves that could really shape how crypto develops in Europe over the next few years. The European Commission just put forward a proposal to give the European Securities and Markets Authority (ESMA) direct supervisory powers over crypto-asset service providers, trading venues, and central counterparties.
What’s interesting, perhaps concerning depending on your perspective, is that ESMA would handle both licensing and supervision. Right now, that’s often split between different bodies at national levels. Faustine Fleuret from Morpho told Cointelegraph she’s particularly worried about this dual role. She thinks it could slow things down for startups trying to get licensed.
Centralization versus national differences
The Commission’s argument, from what I can gather, is that having different national approaches creates uneven playing fields. Some countries might be quicker to license crypto firms, others slower. Some might interpret rules differently. By centralizing under ESMA, they’re aiming for consistency across the EU’s 27 member states.
But Elisenda Fabrega at Brickken points out something important – it’s not just about the legal framework. The actual execution matters more. How much capacity will ESMA have? How independent will they be? How well will they work with national authorities? These operational questions could determine whether this helps or hinders the industry.
Broader capital markets ambitions
This isn’t just about crypto, though that’s the part getting most attention. The whole package aims to make EU capital markets more competitive with the US. The numbers are pretty stark – US stock markets are worth about $62 trillion globally, while EU markets sit around $11 trillion. That’s a big gap they’re trying to close.
Some are comparing this to the US Securities and Exchange Commission model. Actually, European Central Bank President Christine Lagarde first floated this kind of centralized approach back in 2023. Now it’s moving forward as a formal proposal.
What happens next
Nothing’s final yet. The proposal needs approval from both the European Parliament and the Council, and they’re currently negotiating. That process could take months, maybe longer. There will likely be amendments, compromises – the usual EU legislative dance.
I keep thinking about the tension here. On one hand, clearer, more consistent rules could help legitimate crypto businesses operate across Europe without navigating 27 different systems. On the other hand, centralization often means slower processes, more bureaucracy, less flexibility for innovation.
The crypto industry in Europe has been adapting to MiCA regulations, and now this could add another layer. It’s worth watching how this develops, especially for smaller firms that might struggle with more complex licensing procedures. But maybe larger institutions would prefer the certainty of a single EU-wide approach.
We’ll have to see how the negotiations go. These things rarely end up exactly as proposed.
