The European Commission, the executive arm of the European Union (EU), proposed ending individual countries’ oversight of cryptocurrency companies and transferring responsibility to the bloc’s market regulator as part of moves to “fully integrate” EU financial markets.
The commission wants to address the inconsistencies 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 with 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-Asset (MiCA) regulation, individual countries were too diverse for ESMA’s liking. Unifying the supervision of crypto and other financial services under one body will be more effective, it said.
“EU financial markets remain significantly fragmented, small and uncompetitive, missing out on potential economies of scale and efficiencies,” the commission said.
Regulators in individual countries, such as France’s AMF, Austria’s FMA and Italy’s Consob, raised concerns and asked ESMA to take tighter controls on MiCA in September.
ESMA is the EU’s closest equivalent to the Securities and Exchange Commission (SEC) in the USA. However, ESMA’s role is more one of coordination rather than the direct supervision exercised by the SEC. The move to integrate the financial markets and transfer “direct supervisory powers” can be seen as a step towards making the regulator closer to an EU-SEC equivalent.
