The European Central Bank (ECB) has endorsed a proposal to centralize oversight of large crypto firms and cross-border trading platforms under the European Securities and Markets Authority (ESMA), arguing that stronger supervision is necessary as the digital asset sector grows increasingly connected to traditional finance.
In a legal opinion published this month, the ECB supported plans to strengthen EU-level supervision for financial market participants that operate across multiple jurisdictions.
The proposal aims to reduce fragmentation in regulatory oversight and improve consistency across the European Union’s financial markets.
Under the current framework, many crypto-asset service providers are supervised primarily by national authorities under the EU’s Markets in Crypto-Assets (MiCA) regulation. However, the ECB believes that the rapid growth of the sector and the expansion of cross-border services may require more centralized oversight.
The central bank warned that deeper integration between crypto markets and the traditional financial system could increase systemic risks if supervision remains fragmented. Centralized monitoring by ESMA, the EU’s markets regulator, could help ensure consistent enforcement of rules and improve risk detection across the bloc.
The proposal focuses particularly on large crypto-asset service providers operating across multiple EU member states. Companies that reach certain thresholds in terms of users, trading activity, or assets held on behalf of customers could potentially fall under direct EU-level supervision.
According to the ECB, assigning oversight responsibilities to ESMA would also support the broader objective of strengthening the EU’s capital markets and improving coordination among regulators.
Despite the support from the ECB, the proposal has faced resistance from some member states. Countries such as Malta have reportedly argued that the current MiCA regulatory framework is still relatively new and should be given time to operate before significant structural changes are introduced.
The debate highlights the ongoing challenge of balancing innovation and financial stability as the European Union continues to refine its approach to regulating the rapidly evolving crypto industry.
