ECB backs shifting EU crypto oversight to ESMA

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ECB backs shifting EU crypto oversight to ESMA

Highlights

The ECB supported giving ESMA powers over the authorization, monitoring, and enforcement of all CASPs in the EU.
The regulator says this would reduce supervisory fragmentation and cross-border risks for the single market.
The decision is not final yet: the reform package must still pass through the European Parliament and the Council of the EU, and ESMA would need more resources and staff.

The move concerns crypto-asset service providers, or CASPs: exchanges, custodians, brokers, and other firms operating under MiCA rules. The ECB explicitly supported giving ESMA powers over the authorization, monitoring, and enforcement of all CASPs, responsibilities that are now largely handled by national supervisory authorities.

In the ECBs view, a single supervisor is needed because crypto businesses increasingly operate through cross-border corporate structures, meaning the risks already extend well beyond any single jurisdiction.

At the same time, the ECB adds an important caveat: centralization will not work without funding and staff. In its opinion, the bank stresses that ESMA will need adequate financing, personnel, and a clearly managed transition period, while national regulators should retain a meaningful role so that the new system does not produce enforcement gaps at the outset. Formally, this is not a final decision but the ECBs position on a reform package that must still be agreed by the European Parliament and the Council of the EU.

From MiCA to tighter centralization

Until now, the EUs supervisory architecture has been built around MiCA, the bloc-wide regulation for crypto markets that introduced common rules for the issuance, offering, and trading of crypto-assets, as well as for the authorization and supervision of crypto service providers. MiCA entered into force in June 2023, and under the current model ESMA already issues guidance for national authorities and maintains an interim register of service providers.

But this is also where, judging by the position of Brussels and Frankfurt, the current system has shown its limits. The central bank said supervision of capital markets in the EU remains complex and fragmented: Europe has 52 national supervisory authorities even as many market participants already operate across borders. On December 4, 2025, the European Commission proposed a reform package aimed at removing some of these barriers and giving ESMA direct oversight not only over parts of market infrastructure but also over crypto service providers.

Implications for the European crypto market

The ECBs position could become an important step toward creating a more unified and stricter regulatory framework for crypto-assets in Europe.

Shifting supervisory powers to the supranational level could significantly reshape the operating environment for crypto companies in the EU, make the rules more consistent across member states, and strengthen investor protection.

We have previously highlighted that ECB prepares digital euro standards with launch timeline set.

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