EU proposal would centralize crypto supervision under ESMA amid MiCA concerns

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Artem Shendetskii

04.12.2025

EU proposal would centralize crypto supervision under ESMA amid MiCA concerns — EU seeks tighter control of CASPs as ESMA prepares for direct supervision

The European Commission has unveiled a landmark proposal to greatly expand the powers of the European Securities and Markets Authority (ESMA), granting it direct supervisory authority over crypto-asset service providers (CASPs), trading venues, and central counterparties.

If approved by the European Parliament and the Council, ESMA would begin functioning much more like the U.S. Securities and Exchange Commission, creating a centralized regulatory gatekeeper for digital assets and broader capital markets across the EU, reports Cointelegraph.

The proposal follows mounting pressure from France, Austria, and Italy, each of which argues that uneven enforcement across member states—highlighted by ESMA’s scathing July review of Malta’s crypto oversight—creates regulatory loopholes that undermine MiCA. These governments have even warned they may block “passporting” of licenses from jurisdictions they view as too permissive. The package also includes calls for tougher rules on extra-EU crypto activity, upgraded cybersecurity requirements, and a fresh review of token-offering rules.

Lagarde’s ‘European SEC’ vision gains traction amid competitiveness concerns

The move marks a major step toward a concept first floated by ECB President Christine Lagarde in 2023, when she argued that a “European SEC” was necessary to manage cross-border systemic risks posed by large financial and crypto firms. Europe’s fragmented regulatory landscape, divided among dozens of national authorities, has long been seen as a barrier to capital formation and startup scaling.

By contrast, the U.S. capital markets—backed by centralized regulatory enforcement—stand at nearly 270% of GDP, compared to just 73% in the EU. The Commission hopes that stronger, unified oversight under ESMA could help close this gap and stimulate wealth creation across the bloc. Yet the political negotiations ahead remain significant, with member states now debating how much authority to shift from domestic regulators to the Paris-based authority.

Industry warns that ESMA centralization could slow fintech and crypto innovation

Crypto and fintech leaders caution that giving ESMA sweeping control could unintentionally hinder Europe’s ability to compete in digital finance. Morpho’s public affairs head, Faustine Fleuret, told Cointelegraph that concentrating supervision at the EU level may slow authorizations, increase compliance complexity, and demand enormous resources that could delay decisions for emerging startups.

Smaller companies often rely on close collaboration with their national regulators—relationships that may be diluted under ESMA-first oversight. Critics fear this could reduce Europe’s attractiveness as a launchpad for Web3 innovation just as MiCA is coming online. Nevertheless, supporters argue that robust, consistent enforcement is essential to prevent regulatory arbitrage and ensure trust in Europe’s evolving digital-asset market infrastructure.

Recently we wrote that Ripple CEO Brad Garlinghouse delivered one of his most optimistic outlooks yet, predicting Bitcoin will hit $180,000 by the end of 2026.

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