- ESMA may gain direct authority over the European Union’s crypto licensing.
- The reform would replace fragmented national supervision, which was the previous norm.
- The ESMA shift aligns with global regulation, as the U.S. also introduces new tax reforms.
The European Commission is preparing a legislative reform that would give ESMA direct supervisory control over crypto-asset service providers across the European Union. The move centralizes oversight, which is currently handled by individual member-state regulators. A draft of the proposal is expected next month.
According to trusted sources on X, the framework would shift the licensing and monitoring of crypto firms to a single EU-level authority. The change would mark the most significant restructuring of the bloc’s crypto-asset oversight since the full implementation of MiCA in December 2024. The ESMA will be at the center of the region’s regulatory architecture.
Under the reform, ESMA would become responsible for authorizing and supervising Crypto-Asset Service Providers (CASPs). Today, firms operating in the EU obtain licenses from regulators in countries such as France, Germany, Spain, or the Netherlands, with compliance expectations often differing across jurisdictions. Centralizing these responsibilities under the watchdog is intended to produce uniform enforcement standards and eliminate the regulatory fragmentation that has persisted during MiCA’s rollout.
MiCA’s Regulatory Expansion Sets the Stage for Stronger ESMA Oversight
With MiCA fully applicable since 2024, traditional financial institutions have been pulled into the crypto-asset ecosystem. All their activities are subject to CASP classifications from which banks are supposed to obtain the relevant authorizations. This forces banks to prove that they are resilient, secure, and governed in a harsh manner.
Several national regulators have already caved to regulatory arbitrage, citing variations in supervision of different jurisdictions under the EU. Many authorities have cited that there exist differences in the intensity of enforcement in France, Italy, and Austria. Such differences raise anxieties that certain member states might turn into havens for firms that are less regulated. The main purpose of centralizing supervision under ESMA is to eliminate this risk, develop a single licensing framework, and reduce interpretive differences.
Financial implications for the operation of financial institutions are high. Banks seeking services that are regulated under MiCA are required to develop systems that will protect the private keys and token settlement procedures. The banks must also conduct market-integrity monitoring. They must also establish dedicated digital asset management teams. They also have to ensure segregation between conventional banking operations and blockchain-based services.
Global Regulatory Context Shifts as the U.S. Pursues Token Taxonomy Reform
The European reform also arrives as the United States, which recently signed its crypto bill, advances its own regulatory overhaul. In recent remarks, SEC Chair Paul Atkins outlined plans for a “token taxonomy” designed to clarify which digital assets fall under securities regulation. The structure will rely on the long-standing Howey Test. However, Atkins emphasized that networks evolve, control disperses, and tokens may no longer rely on an issuer’s managerial efforts over time.
Atkins also directed SEC staff to explore mechanisms allowing investment-contract tokens to trade on platforms regulated by the CFTC or state authorities. He also wishes the SEC to explore potential exemptions to form a tailored offering regime for digital assets. Although the U.S. regulatory landscape remains uncertain while Congress debates multiple market-structure bills, the SEC’s shift mirrors Europe’s trajectory toward clearer, more predictable oversight.
For the EU, integrating crypto oversight under ESMA achieves a similar goal. The goals are to remove uncertainty, increase investor protection, and prepare the financial system for further integration with blockchain-based assets. Both areas are developing mature regulatory frameworks that focus on risk management, operational resilience, and cross-border collaboration.
If passed, the proposal will make ESMA the most powerful regulatory authority in Europe’s digital asset market. Its direct control over CASP licensing and monitoring would simplify supervision, minimize fragmentation, and influence how crypto-asset services expand under MiCA.
