- Under MiCA, companies can currently obtain cross-border access with a single national licence.
- National regulators and firms fear losing control and facing increased bureaucracy.
- France, Austria and Italy have supported expanding ESMA’s role for large firms.
The European Commission is preparing a proposal to grant the European Securities and Markets Authority (ESMA) broader powers in the cryptocurrency sector.
If approved, ESMA would become the sole authority responsible for supervising all crypto-asset service providers across the European Union, Bloomberg reports.
The draft proposal represents a major shift in how the bloc regulates digital assets, centralising oversight in one supervisory body rather than relying on 27 national regulators.
The plan, expected to be published next month, comes just months before the Markets in Crypto-Assets regulation (MiCA) is due to be fully implemented.
MiCA, adopted in 2023, is set to become the EU’s flagship framework for crypto regulation.
As it stands, MiCA allows companies to obtain a licence in one member state and operate throughout the EU.
This “passporting” system is the result of years of work by both regulators and industry.
MiCA’s future in question
MiCA was designed to provide legal clarity and regulatory consistency across the EU.
The passporting mechanism lets firms secure authorisation in one country and offer services in others, reducing fragmentation and making operations more efficient.
The Commission’s new plan would overturn that process by giving ESMA direct responsibility for approving and supervising all service providers, regardless of where they are based.
The draft also envisages that ESMA could delegate tasks back to national authorities if needed, but the central point of contact would remain ESMA. That change has raised concerns among those involved in MiCA’s rollout.
With the implementation window closing in 2024, companies and local regulators worry that altering the framework now could cause delays and confusion.
Critics argue restarting debate over MiCA could undermine legal certainty. Others warn that shifting responsibility to ESMA without sufficient resources could weaken enforcement.
The proposal will still require approval from both the European Parliament and the Council of the EU before becoming law.
Regulators push back
The Commission’s move has not gone unnoticed by industry bodies. Many believe national regulators are better placed to handle day-to-day engagement with firms.
Industry group Blockchain for Europe warned that centralising supervision at this stage could distract from smoothly implementing MiCA.
Consultants and experts have also noted that ESMA would need additional staff and funding to manage such responsibilities effectively.
National authorities have already invested heavily in teams and expertise to meet MiCA requirements. Replacing that network with a centralised process could delay licensing and supervision.
ESMA chair Verena Ross said earlier this year that having 27 separate supervisors preparing for the same task might not be the most efficient model.
France backs centralised approach
France, together with some EU institutions, has been one of the strongest proponents of expanding ESMA’s powers.
In September, regulators from France, Austria and Italy called for ESMA to directly supervise large crypto firms while allowing smaller companies to remain under national oversight.
That proposal would create a two-tier system, offering a compromise between full centralisation and local supervision.
The idea fits a broader EU trend toward concentrating financial oversight in supranational bodies.
Brussels has also suggested granting ESMA authority over clearinghouses, trading venues and custodians.
Some member states have resisted, arguing that abandoning national supervision could add unnecessary bureaucracy and reduce flexibility.
Pressure for reform intensified in July after ESMA voiced concerns about Malta’s crypto licensing practices.
Maltese authorities had issued MiCA approvals to multiple firms, prompting questions about consistency and due diligence across the EU.
The case strengthened the argument for a more harmonised supervisory model.
As the Commission finalises its proposal, the crypto sector remains on edge.
Companies await clarity on whether licensing and supervision will stay at the national level or shift to a single EU-wide authority.