TechFlow News, April 12: According to The Block, on April 9, the European Central Bank (ECB) issued an opinion formally supporting the European Commission’s proposal to centralize regulatory authority over key financial market participants—including large crypto-asset service providers (CASP)—under the Paris-based European Securities and Markets Authority (ESMA).
Under this proposal, supervisory authority over systemically important cross-border entities—including large CASPs, trading venues, central counterparties (CCPs), and central securities depositories (CSDs)—would be transferred from national competent authorities to ESMA. This represents the most significant structural adjustment to the EU’s crypto regulatory framework since the Markets in Crypto-Assets Regulation (MiCA) fully applied to CASPs at the end of 2024. Under the current MiCA framework, national competent authorities serve as first-line supervisors, while ESMA plays only a coordinating role.
In its opinion, the ECB noted that large crypto firms may possess “systemic importance,” and centralized supervision would help prevent risks from spilling over into the banking system. The ECB also recommended granting itself a non-voting seat on ESMA’s Executive Board to provide technical support related to payment systems and monetary policy transmission. Additionally, the ECB warned that ESMA would need to substantially increase its staffing and funding to assume its expanded supervisory responsibilities, and advised adopting a phased transition approach to mitigate operational risks.
Currently, the ECB’s opinion is non-binding. The proposal will now enter negotiations between EU member states and the European Parliament, a process expected to last several months.
