There is a growing dispute in the European Union over the future of oversight of the cryptocurrency market . Malta, one of the key players in the industry, has publicly opposed a proposal by France, Italy and Austria that seeks to give the European Securities and Markets Authority (ESMA) direct supervisory powers over major cryptocurrency firms.
Centralisation or competitiveness?
The three member states’ initiative stems from concerns about the uneven application of new EU rules known as MiCA (Markets in Crypto-Assets). In their view, central oversight by ESMA would ensure regulatory consistency and a level playing field across the single market.
The French regulator has even suggested the possibility of challenging licences issued by other countries, signalling growing tensions.
The Malta Financial Services Authority (MFSA), however, takes a very different view. While it supports the ESMA’s drive towards harmonisation of standards (so-called supervisory convergence), it opposes the centralisation of powers.
According to the MFSA, at the current stage of market development, such a move would only introduce unnecessary bureaucracy that could stifle innovation and damage the competitiveness of the EU crypto sector.
A divided Europe
The dispute highlights a deeper division among European regulators. On the one hand, there are countries which, like France, have long advocated a stronger role for ESMA. The head of the Authority herself, Verena Ross, has expressed her willingness to take on new responsibilities. On the other hand, there are countries that fear losing control and stifling local markets.
Although France, Italy and Austria did not provide concrete examples of divergent interpretations of the rules, their call is a clear political signal. The outcome of this debate will determine the shape and dynamics of the European digital asset market for years to come, influencing the EU’s position as a global hub for financial innovation.
