EU plan to centralize crypto oversight under ESMA dividing the industry

The European Commission is reportedly planning to expand the European Securities and Markets Authority's (ESMA) authority to directly supervise stock exchanges and crypto service providers, aiming for a centralized regulatory framework similar to the US SEC. This proposal, expected in a draft in December, has split industry opinion. Critics, like Faustine Fleuret of Morpho, warn that centralizing supervision under ESMA would strain resources, slow down decision-making, and hinder innovation, especially for fintech newcomers. They suggest ESMA should instead have stronger oversight powers over national regulators, such as license revocation, rather than full centralization. Conversely, policy experts like Dea Markova of Fireblocks view centralized control as beneficial for standardizing guidance on critical issues under MiCA, such as licensing, cybersecurity, and custodial risks, promoting supervisory convergence. This concept of a single supervisory body also aligns with past support from ECB President Christine Lagarde.

(Source：Cointelegraph)