Extending ESMA jurisdiction to include financial markets threatens to slow innovation for crypto and fintech companies, but some policy experts see a silver lining.
The European Commission’s plan to expand the authority of the European Securities and Markets Authority (ESMA) over cryptocurrency and capital markets has sparked debate across Europe, with critics warning it could stifle innovation and slow decision-making.
The European Union is reportedly exploring giving the ESMA direct supervisory powers over stock exchanges and crypto service providers, potentially creating a centralized regulatory framework similar to the US Securities and Exchange Commission (SEC). The European Commission is expected to publish a draft of the plan in December.
Under the existing Markets in Crypto-Assets Regulation (MiCA), which took effect for crypto asset service providers in December 2024, companies authorized in one EU member state can “passport” their licenses to operate across the 27-nation bloc.
