EU Plans Major Shift in Crypto Regulation Under ESMA

The European Union is preparing to overhaul how it supervises cryptocurrency companies. The plan would transfer oversight from individual countries to a single EU-wide regulator, the European Securities and Markets Authority (ESMA).

This move has sparked debate across Europe’s 27 member states.

ESMA Chair Verena Ross confirmed the European Commission is drafting proposals to shift crypto supervision from national regulators to ESMA. The goal is to fix problems caused by having different supervisors in each country enforce the same rules.

“This would provide a key impetus towards having a capital market in Europe that is more integrated and globally competitive,” Ross told the Financial Times.

The Problem with Current Supervision

The EU’s Markets in Crypto-Assets (MiCA) regulation became fully effective in December 2024. It created uniform rules for crypto companies across Europe. However, each country still issues licenses and supervises firms independently.

Marina Markezic from the European Crypto Initiative explains the issue: having 27 different national authorities supervising the same regulation creates problems. This fragmented approach risks undermining MiCA’s main goal of creating consistent rules across Europe.

Ross pointed out that each of the 27 EU countries had to build its own expertise and oversight teams from scratch. “Specific new resources had to be built up 27 times, once in each member state, which could have been done more efficiently at a European level,” she said.

Source: @ESMAComms

The current system has already shown cracks. In July 2025, ESMA criticized Malta’s process for approving crypto companies. The review found Malta granted licenses while important risk issues remained unresolved, including governance problems and cybersecurity concerns.

Who Supports the Change

France, Italy, and Austria are pushing hard for ESMA to take direct control of supervising major crypto firms. These countries worry that without central oversight, companies will shop around for the easiest place to get approved.

The head of France’s financial regulator called for transferring oversight to ESMA to ensure consistent supervision across Europe. France has even suggested it might block crypto licenses granted by other EU countries if standards aren’t aligned.

EU Commissioner for Financial Services Maria Luís Albuquerque has backed the idea. She confirmed the EU is evaluating a formal proposal to transfer oversight of stock exchanges, crypto platforms, and other cross-border entities to ESMA.

Opposition from Smaller Countries

Not everyone agrees with the plan. Malta, Luxembourg, and Ireland have pushed back against giving ESMA more power.

Malta’s Financial Services Authority released a statement saying centralization would “only introduce an additional layer of bureaucracy, which could hinder efficiency during a period when the EU is actively striving to enhance its competitiveness.”

This opposition isn’t surprising. Malta has become a hub for crypto licensing, granting permits to major exchanges like OKX and Crypto.com. As of July 2025, Malta had issued at least five CASP (Crypto Asset Service Provider) licenses under MiCA, making it one of the first movers in Europe.

Claude Marx, who leads Luxembourg’s financial regulator, warned that centralizing all power at ESMA could create a regulatory “monster.” Luxembourg, like Malta, has built a thriving financial services sector and fears losing its competitive edge.

How MiCA Currently Works

Under MiCA, crypto companies can get licensed in one EU country and then operate across all 27 member states. This “passporting” system was supposed to make things easier for businesses.

However, the system has created tensions. Some countries worry that firms are choosing jurisdictions with looser oversight to get quick approvals, then using their licenses to operate everywhere in Europe.

The Netherlands moved quickly on licensing, becoming one of the first countries to grant MiCA approvals to companies like MoonPay and BitStaete. Ireland has also issued licenses to major players like Coinbase and Kraken.

Different countries are handling the transition period differently too. France allows companies 18 months to get fully compliant, while the Netherlands only gives them six months. This inconsistency adds to the confusion.

What Happens Next

ESMA was created in 2011 after the 2008 financial crisis to harmonize financial rules across Europe. When MiCA was first designed, the original plan was to give ESMA central oversight. That idea was dropped over concerns about whether ESMA had the capacity to handle it.

Now the conversation has returned. Ross emphasized that Europe needs stronger capital markets to fund priorities like defense, clean energy, and digital infrastructure. She believes centralized supervision is necessary to achieve those goals.

Any change to the supervisory structure would require agreement among EU member states. Given the strong opposition from Malta, Luxembourg, and Ireland, reaching consensus won’t be easy.

ESMA is already preparing to take on new responsibilities. Starting in 2026, it will supervise equity and bond price data systems and ESG ratings. These smaller steps could pave the way for broader supervisory powers.

The debate highlights a fundamental question about how Europe should regulate crypto: Should oversight be centralized for consistency, or should countries maintain autonomy to compete and innovate?

The Road Ahead

For crypto companies, the stakes are high. A single, centralized supervisor could mean more consistent rules and easier compliance. But it could also mean stricter oversight and higher costs, especially for smaller firms.

Ross noted that “the demand for breaking down barriers has gone up a level” given Europe’s economic challenges. Whether that demand translates into actual reform remains to be seen.

The European Commission is currently drafting the proposals. No official timeline has been announced for when these changes might take effect, but discussions are actively underway at the highest levels of EU policymaking.