EU Centralizes Crypto Oversight Under ESMA in Bid to Compete with US Markets
The European Commission is pushing to consolidate cryptocurrency regulation under a single authority, the European Securities and Markets Authority (ESMA). The move aims to end the current patchwork of national oversight, where firms exploit 'passporting' to seek lax jurisdictions like Malta or Lithuania.
Published December 5 as part of broader financial reforms, the proposal would empower ESMA to function more like the US SEC—establishing uniform standards across all 27 member states. This comes after ESMA criticized Malta's crypto approvals as subpar in July 2024.
The fragmentation has hindered EU capital markets, which lag US counterparts at 73% versus 270% of respective GDP. Centralized regulation could level the playing field for crypto assets like BTC, ETH, and DOT while curbing regulatory arbitrage.
