The European Commission is preparing a proposal that would dramatically reshape how cryptocurrency assets are supervised across the European Union.
According to early details expected to be formalized in December 2025, the plan would centralize regulatory authority under the European Securities and Markets Authority (ESMA). The shift comes amid growing concern that the current MiCA-driven, member-state-by-member-state system has created regulatory gaps, uneven enforcement, and competitive imbalances across the bloc.
ESMA Set to Gain Broad Supervisory Powers
Under the forthcoming draft, ESMA would be granted direct oversight of stock exchanges and crypto asset service providers, expanding its role to something closer to the U.S. Securities and Exchange Commission. This would mark a significant departure from the existing MiCA structure, where companies can obtain a license from one national regulator and “passport” it throughout the EU.
The Commission views this fragmentation as a systemic weakness, particularly as some countries have been accused, most notably by France, of pursuing a “race to the bottom” by offering lenient oversight to attract crypto firms.
Targeting Major Cross-Border Crypto Firms
While ESMA would take responsibility for supervising the most significant cross-border players, national regulators would continue overseeing smaller, domestic firms. The framework is designed to streamline oversight of systemically important entities without fully removing member states from the supervisory landscape.
Industry Split on Whether Centralization Helps or Hurts
The proposal has triggered mixed reactions across the fintech and crypto sectors.
Critics warn that shifting all meaningful supervisory authority to ESMA could slow innovation, increase administrative burdens, and create barriers for smaller companies that rely on lighter national processes to grow. Countries like Malta and Luxembourg—both beneficiaries of MiCA’s decentralized model, have expressed caution about relinquishing control to a central authority.
On the other side, supporters argue that a unified supervisory structure is overdue. European Central Bank President Christine Lagarde, along with regulators in France, Italy, and Austria, believes that centralized oversight is essential to ensuring competitive, harmonized financial markets across the EU.
A Debate That Will Define MiCA’s Next Phase
The draft proposal will spark an intense political and regulatory debate once released. Approval will require agreement from both the European Parliament and all EU member states—a process that may prove contentious given the competing national interests.
Still, the push toward centralization reflects a growing consensus among larger member states and EU officials that fragmented enforcement undermines MiCA’s purpose. If adopted, the shift would mark one of the most significant evolutions in Europe’s digital-asset regulatory architecture and reshape how crypto companies operate across the continent.
