Pooled Order Books in the Crosshairs as EU Regulators Look to Tighten MiCA Oversight
EU regulators, led by ESMA, are considering tighter oversight on crypto trading, focusing on restricting pooled order books that share liquidity outside the EU.Summary
The European Securities and Markets Authority (ESMA) is preparing to increase centralized control over crypto regulation under the Markets in Crypto Assets (MiCA) regime, partly due to concerns that some member states are issuing licenses too quickly. A key area of focus is the use of pooled order books that share liquidity with non-EU, non-MiCA-regulated trading platforms. While shared order books increase liquidity for traders, regulators view them as blurring responsibility for matching, disclosures, and risk management. ESMA has previously stated that MiCA does not permit pooling order books with non-EU platforms, a stance supported by national regulators like France's AMF, which seeks explicit clarification in the MiCA framework regarding EU-based substance and control over trading infrastructure.
Experts suggest that forcing EU-only pools could fragment liquidity and widen spreads initially, though markets may adapt. Firms like Coinbase, which operate as brokers under MiCA, argue that models allowing them to source liquidity from non-EU exchanges while maintaining local substance and control are viable and beneficial for clients. However, regulators worry about client assets being exposed if an external exchange fails. The debate centers on defining the necessary level of operational separation and control to satisfy the tightening regulatory scrutiny.
(Source：CoinDesk)