EU’s Proposed ESMA Reform Faces Resistance from Smaller States

The European Commission is reportedly planning a reform to centralize cryptocurrency regulation under the European Securities and Markets Authority (ESMA), according to PANews citing Financial Times, sparking local resistance.

This proposed shift could reshape financial oversight in the EU, potentially impacting local financial sectors and consumer protection under the current MiCA framework.

Crypto Oversight Shift Sparks Diverse EU Reactions

The European Commission is reportedly planning a reform that would grant the European Securities and Markets Authority (ESMA) direct regulatory authority over cryptocurrency companies in the EU. The move, aimed at integrating EU financial markets, is facing opposition from smaller member states. Industry experts suggest this shift could centralize control, increasing efficiency or potentially disadvantaging smaller national financial industries. Luxembourg and Malta have expressed concerns about local economic impacts.

Smaller EU States Challenge Centralization in Financial Regulation

“A core focus in 2026 is ESMA’s ambitious, and at the same time pragmatic, approach to simplification and burden reduction. We are pursuing a holistic strategy to streamline rules, enhance risk-based supervision and ensure proportionate reporting requirements across the ESMA remit.” — Verena Ross, Chairperson, ESMA source

Market Data

Did you know? The EU’s MiCA regulation currently delegates crypto oversight to national authorities, highlighting the shift from regional to centralized governance for the first time in EU financial market history.

Ethereum (ETH) is trading at $4,572.92, with a market cap of $formatNumber(551965804452, 2). Over the past 90 days, Ethereum has seen a significant increase of 77.53%. CoinMarketCap data shows a 24-hour trading volume of $formatNumber(32351350158, 2), marking a decrease of 22.70%.

Analysts from the Coincu research team indicate this regulatory shift could lead to increased compliance for crypto firms but might streamline operations, thus encouraging investment in EU-based cryptocurrency projects. This may create a competitive environment that could significantly alter the regulatory and technological landscape for smaller member states and market participants.