The European Commission is currently working on drafting new regulations that would give the European Securities and Markets Authority (ESMA) more authority over cryptocurrency companies, shifting the oversight from national regulators to a centralized European body.
Summary:
– EU lawmakers are in the process of proposing reforms to grant ESMA direct supervision over crypto firms, moving away from the jurisdiction of individual member states.
– This proposal has sparked concerns from smaller EU countries like Malta and Luxembourg, who fear losing regulatory autonomy and competitiveness.
According to a report from the Financial Times, the European Union is considering transferring regulatory powers for cryptocurrencies from national authorities to ESMA. This move is part of a larger proposal to give ESMA direct oversight over stock exchanges, crypto companies, and clearinghouses in the EU.
Verena Ross, the Chair of ESMA, stated that the European Commission is currently working on regulatory reforms to standardize regulatory supervision across European capital markets. The EU had previously suggested making ESMA the primary supervisor of crypto firms when the Markets in Crypto-Assets (MiCA) regulation was first introduced, but this has not been fully implemented yet.
The idea of ESMA becoming the sole regulator for cryptocurrencies in the EU has faced resistance from smaller countries like Malta and Luxembourg. Malta, in particular, has been actively granting licenses to crypto asset service providers under the MiCA framework, including major exchanges like Crypto.com and OKX.
As of July 2025, Malta has issued at least five licenses to CASPs under the MiCA regulation, making it an early adopter of the EU’s comprehensive crypto-asset framework. However, ESMA has criticized Malta’s licensing process for crypto companies, raising concerns about inadequate risk assessment.
The proposal to centralize crypto regulation under ESMA has stirred controversy, with some EU nations expressing reservations about giving too much power to a single authority. Luxembourg, Malta, and Ireland have raised concerns about potential threats to their established financial sectors and the stifling of innovation in the crypto industry.
Claude Marx, head of Luxembourg’s financial watchdog CSSF, warned against placing all EU investment funds under ESMA’s supervision, cautioning against creating a bureaucratic “monster” within the complex organization. The debate over centralizing regulatory authority for crypto assets continues to unfold within the EU.
Overall, the push to empower ESMA with greater oversight over crypto companies reflects the ongoing efforts to harmonize regulations across the EU. However, the balance between centralized supervision and preserving regulatory autonomy for individual member states remains a contentious issue within the evolving landscape of cryptocurrency regulation.