ESMA crypto supervision should centralize oversight of major crypto firms under the Markets in Crypto‑Assets (MiCA) framework to prevent regulatory arbitrage and protect EU monetary sovereignty. Tightening MiCA rules on multi‑issuance stablecoins and assigning direct ESMA authority would ensure consistent enforcement across the bloc.
Centralize supervision under ESMA to reduce regulatory arbitrage and protect the euro.
Restrict multi-issuance stablecoins and require full, verifiable reserves for euro-linked tokens.
ESMA oversight ensures uniform passporting enforcement and lowers systemic risk across EU markets.
ESMA crypto supervision: centralize oversight under ESMA, tighten MiCA rules on multi-issuance stablecoins, and protect EU monetary sovereignty — read the full analysis.
The Bank of France’s governor called for crypto oversight to be given to the European Securities and Markets Authority, and for tightening MiCA’s rules on stablecoin issuance.
What is ESMA crypto supervision and why is it being proposed?
ESMA crypto supervision refers to granting the European Securities and Markets Authority a direct mandate to supervise major crypto-asset issuers under the EU’s Markets in Crypto‑Assets (MiCA) framework. Centralized ESMA oversight aims to ensure uniform enforcement, reduce arbitrage and protect EU monetary sovereignty.
How would ESMA oversight change MiCA enforcement?
Direct ESMA supervision would shift primary supervisory authority from national regulators to a single European body. This would minimize uneven licensing and enforcement that currently arises from differences in national practices. Paris-based ESMA could apply consistent standards across member states and tighter rules on stablecoin issuance.
Why are multi-issuance stablecoins a concern?
Multi-issuance stablecoins allow the same token to be issued inside and outside the EU with partial reserves. The Bank of France’s Governor François Villeroy de Galhau warned this could weaken the euro and increase dependence on non‑European entities. The European Systemic Risk Board (ESRB) recommended prohibiting multi-issuance to reduce systemic and arbitrage risks.
What do national regulators say?
National authorities echo parts of this argument. Bank of Italy Deputy Governor Chiara Scotti highlighted legal and operational risks tied to multi-issuance structures. France’s AMF has raised enforcement-gap concerns and may challenge passport validity if national supervision proves inconsistent.
When would centralized supervision be implemented?
The European Commission is developing reforms to shift supervision for selected financial sectors, including crypto, to ESMA. ESMA Chair Verena Ross has publicly supported a move toward integrated oversight to boost competitiveness and investor protection. Implementation timing depends on legislative agreement and technical rulemaking under MiCA.
Comparative summary: National vs ESMA supervision
| Feature | National Supervision | ESMA Supervision |
|---|---|---|
| Consistency | Variable across member states | Uniform EU-wide application |
| Enforcement | Prone to gaps and weak licensing | Stronger cross-border enforcement |
| Stablecoin rules | Different interpretations | Harmonized restrictions (e.g., limit multi-issuance) |
Key Takeaways
- Centralized oversight: ESMA supervision would reduce regulatory arbitrage and ensure consistent enforcement across the EU.
- Stablecoin risk: Multi-issuance stablecoins pose threats to euro sovereignty and should face stricter MiCA limits and reserve requirements.
- Passporting scrutiny: Uniform ESMA oversight would strengthen the passporting system by addressing weak national licensing.
Frequently Asked Questions
Can ESMA directly supervise crypto firms under current MiCA rules?
MiCA currently assigns responsibilities primarily to national authorities. To give ESMA direct supervisory authority would require additional EU-level mandates and implementing measures to expand ESMA’s remit within the MiCA framework.
How do multi-issuance stablecoins amplify risk?
Multi-issuance amplifies legal and operational complexity by allowing the same token to circulate under different reserve regimes. This increases contagion risk during stress events and can weaken monetary sovereignty if non‑European issuance becomes dominant.
Will centralized supervision block innovation?
Centralized supervision aims to balance market access and investor protection. It can preserve innovation while enforcing consistent safeguards that prevent regulatory arbitrage and systemic vulnerabilities.
Conclusion
ESMA crypto supervision and stricter MiCA rules on stablecoins would strengthen investor protection, reduce arbitrage and help preserve EU monetary sovereignty. The Bank of France and other regulators have identified multi-issuance as a systemic gap. Policymakers now face a choice: harmonize oversight under ESMA or accept fragmented supervision with higher systemic risk.
Published: 2025-10-09 — Updated: 2025-10-09 — Author: COINOTAG