REGULATION | The European Central Bank Supports Plan to Supervise Major Crypto Firms Under EU Financial Markets Regulator

The European Central Bank (ECB) has backed a European Union (EU) proposal to centralize oversight of major crypto firms under the bloc’s markets regulator, marking a potential shift toward tighter supervision.

In a published opinion, the ECB said it “fully supports” plans to place systemically important crypto-asset service providers and large trading platforms under the authority of the European Securities and Markets Authority (ESMA), rather than national regulators.

The move would represent the most significant overhaul of EU crypto supervision since the Markets in Crypto-Assets (MiCA) framework took effect, which currently allows firms licensed in one member state to operate across the bloc.

The ECB said a centralized model would help reduce regulatory fragmentation and strengthen financial stability as crypto firms become more interconnected with the traditional financial system.

However, the central bank cautioned that ESMA would need additional staffing and funding to handle its expanded role and called for a gradual transition from national supervision to avoid market disruption.

The proposal, which is non-binding but influential, will now be negotiated by EU member states and the European Parliament. Some countries have already expressed concerns that the shift may be premature given MiCA only recently came into force.

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