The European Commission, the executive arm of the European Union (EU), proposed ending oversight of cryptocurrency companies by individual countries and transferring responsibility to the bloc’s markets regulator as part of measures to “fully integrate” the EU’s financial markets.
The commission wants to address discrepancies resulting from different supervisory approaches among the 27 member states and transfer supervision to the European Securities and Markets Authority (ESMA), it said in a statement on Thursday.
The proposals must be negotiated and approved by the European Parliament and the European Council.
The move follows reports of concerns that, despite the goal of achieving a unified crypto regulatory environment under the Markets in Crypto Assets (MiCA) regulation, individual countries were diverging too much for ESMA’s liking. Uniting oversight of cryptocurrencies and other financial services under a single body will be more effective, he said.
“EU financial markets remain significantly fragmented, small and uncompetitive, missing out on potential economies of scale and efficiency gains,” the commission said.
Regulators from individual countries, such as France’s AMF, Austria’s FMA and Italy’s Consob, expressed concern and asked ESMA to take stricter control of MiCA in September.
ESMA is the EU’s closest equivalent to the US Securities and Exchange Commission (SEC). However, ESMA’s role is more of coordination than direct supervision exercised by the SEC. The move to integrate financial markets and transfer “direct supervisory powers” could be seen as a step to bring the regulator closer to an equivalent of the EU SEC.
