The European Commission, the executive arm of the European Union (EU), proposed ending individual countries’ supervision of cryptocurrency companies and transferring the responsibility to the bloc’s markets regulator as part of measures to “fully integrate” EU financial markets.
The commission wants to address the discrepancies that result from differing supervisory approaches among the 27 member states and transfer oversight to European Securities and Markets Authority (ESMA), it said in a Thursday statement
The proposals need to be negotiated with and approved by the European Parliament and European Council.
The move follows reports of concerns that despite the aim of achieving a unified crypto regulatory environment under the the Markets in Crypto-Asset (MiCA) regulation, individual countries were diverging too much for ESMA’s liking. Uniting oversight of crypto and other financial services under one body will be more effective, it said.
“EU financial markets remain significantly fragmented, small and lack competitiveness, missing out on potential economies of scale and efficiency gains,” the commission said.
Regulators in individual countries, such as France’s AMF, Austria’s FMA and Italy’s Consob, raised concerns and asked ESMA to take tighter control of MiCA in September.
ESMA is the EU’s closest equivalent to the Securities and Exchange Commission (SEC) in the U.S. However, ESMA’s role is more one of coordination rather than the direct supervision wielded by the SEC. The move to integrate financial markets and transfer “direct supervisory competences” might be seen as a step toward making the regulator closer to an EU SEC equivalent.