ECB Backs ESMA as Sole Supervisor for Large Crypto Firms

The European Central Bank has formally backed a plan to centralize oversight of large crypto-asset service providers under the European Securities and Markets Authority.

Reuters reported on June 11, citing an ECB opinion published June 9, that the central bank "fully supports" the European Commission's proposed overhaul of the supervisory framework. The plan would concentrate oversight of key financial market participants, including large crypto-asset service providers, at ESMA.

If implemented, the proposal would shift away from the current system in which national regulators oversee the sector. ESMA would gain direct supervisory authority over large firms with significant cross-border operations. The move would mark the biggest structural change since the Markets in Crypto-Assets regulation, or MiCA, took effect at the end of 2024.

The ECB said the growing influence of large crypto firms on the financial system makes an integrated supervisory framework necessary to safeguard financial stability.

The central bank added that ESMA would need additional staff and resources if its remit is expanded. It also said authority should be transferred gradually from the existing national supervisory structure.

Under the current MiCA framework, national regulators act as primary supervisors, while ESMA plays a coordinating role. But regulatory disparities have fueled calls for centralized oversight, as some large exchanges have obtained licenses through specific jurisdictions.