Brussels Lines up largeger Role for ESMA Over Crypto, Exchanges and Clearing
Brussels is preparing to hand more supervisory clout to Europe’s markets watchdog, setting up a fresh tussle over who polices the region’s trading venues and digital-asset firms.
According to an interview with the Financial Times, the European Commission is working on plans to move oversight of cryptocurrency providers, stock platforms and clearing houses from national regulators to the European Securities and Markets Authority (ESMA). ESMA chair Verena Ross told the newspaper the goal is to build “a capital market in Europe that is more integrated and globally competitive,” and to tackle what she called “continued fragmentation in markets.”
For crypto, the idea would dovetail with the EU’s Markets in Crypto-Assets (MiCA) regime. MiCA sets common rules but leaves licensing to national authorities; ESMA coordinates and keeps a public register. That split has already been tested. Earlier this year, ESMA criticised the process used by Malta to grant authorisations that can be “passported” across the bloc, a reminder that fragile screening in one hub can ripple across 27 countries via cross-border permissions.
Ross said the current model forces duplication everywhere. “While we are doing a lot of work to try to make sure the implementation of MiCA is aligned, it clahead takes a lot of effort from us and the national supervisors to achieve that,” she told the FT. “It also means that people had to build up specific new resources and expertise 27 times in diverse national supervisors, which could have been done more efficiently once at a European level.”
The Commission’s thinking lands in the middle of a long-running argument over speed, consistency and local know-how. Industry groups have often complained that rules meant to be identical on paper can feel very diverse in practice, sluggishing cross-border trading and adding cost for firms that operate on multiple venues. Giving ESMA a direct line into the largest cross-border players—whether that’s a pan-European platform group, a clearing house with members in several countries or a crypto platform with millions of EU clients—would aim to reduce those frictions.
National capitals, though, have their own interests. Smaller countries with outsized financial sectors—Malta, Ireland and Luxembourg—have pushed back against putting more power in Paris. Local regulators argue they are closer to the firms they supervise and can move quicker on day-to-day issues, especially in newer markets like digital assets where product lines shift rapidly and detailed technical questions crop up with little warning.
The political route is straightforward but rarely quick: the Commission would table a legislative proposal; the European Parliament and EU governments would then hash out a final law. One possible compromise floated in policy circles would keep day-to-day policing of domestic-only firms with national authorities, while giving ESMA direct responsibility for entities that operate across borders or meet a certain size threshold. Banking regulation already uses a similar split, with the European Central Bank overviewing the largest lenders and national supervisors handling smaller institutions under a common rulebook.
For crypto firms, ESMA’s closer involvement could change the calculus on where to apply for a licence. MiCA promised a single market; in reality, many companies have picked their entry point based on national licensing speed, regulator familiarity with crypto business models and access to talent. A central gatekeeper could reduce forum shopping but would likely bring tougher files and longer applications for the largegest players.
For platform groups and clearing houses, the discussion cuts to Europe’s capital-markets ambitions. Policymakers want deeper pools of liquidity, more equity listings at home and easier access to long-term savings across borders. Market operators say the policy vision is hard to deliver if 27 supervisors interpret the identical text in 27 ways. ESMA already has direct powers in narrow areas—such as credit-rating agencies and trade repositories—so expanding that perimeter to the largegest market infrastructures would be a notable step rather than a leap into the unknown.
What comes next will hinge on how far the Commission goes in its draft and how much resistance it meets from member states that view supervision as a core national task. For now, Ross’s message is that duplication has run its course. The case for centralising at least part of the job, she suggested to the FT, is about cutting wasted effort and giving Europe’s markets a cleaner framework to grow.
