The European Central Bank supports the European Commission's proposal to transfer regulatory oversight of major crypto companies from individual EU member states to the European Securities and Markets Authority (ESMA), aiming for deeper integration and reduced market fragmentation.
The European Central Bank has boosted a proposal to take away EU member states' regulatory oversight of crypto and hand it to the European Union’s market regulator.The European Central Bank has supported the European Commission’s plan to bring the supervision of major crypto companies under the EU’s financial markets regulator.
published on Friday that it fully supports bringing oversight of systemically important cross-border capital market companies, such as large trading platforms and crypto companies, under the European Securities and Markets Authority . The central bank said the proposals “constitute an ambitious step towards deeper integration of capital markets and financial market supervision within the Union.” The opinion is nonbinding, but it will still be a major boost to the plan, which is set to be the most significant overhaul of how the EU will regulate crypto companies since theUnder MiCA, crypto-asset service providers, or CASPs, are allowed to operate under the supervision of an EU member country’s regulator to serve the entire bloc, with ESMA setting some standards and guidelines.to get licensed, with Kraken setting up its EU arm in Ireland, while Coinbase and Bitstamp chose Luxembourg. Bitpanda set up in Austria, while its EU asset management arm chose to be licensed in Germany., have pushed back against the plan, calling it premature, arguing that the MiCA laws for CASPs only came into force in December 2024.The ECB said that “transferring authorisation, monitoring and enforcement powers for all CASPs” from national regulators to ESMA would “ensure supervisory convergence, reduce fragmentation and mitigate cross-border risks in crypto-asset markets, thereby supporting financial stability and the integrity of the single market.”It noted that banks are increasingly linking with crypto companies by offering crypto services to customers or by servicing crypto companies, which it argued could transmit “shocks into the financial system” from crypto. The ECB added that the trend underscored “the need for a centralised Union supervisory regime for CASPs, capable of addressing the systemic risks posed by CASPs with significant activities, preventing risk migration into the banking system and safeguarding financial stability.” The central bank said that ESMA would need to be given sufficient funding and staff if it were to take on the responsibility of directly policing crypto companies. The plan is likely still months away from becoming law, as EU lawmakers and governments will negotiate the proposal before the European Parliament takes further action.Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy
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