The European Central Bank has backed a European Commission plan to centralize financial supervision across the EU, including oversight of crypto-asset service providers, though it warned the initiative must be properly resourced to succeed.
The push is part of a broader effort led by France and Germany to boost the bloc’s competitiveness as it faces sluggish growth and mounting pressure from the US and China.
What the proposal covers
The plan would shift supervision of systemically important, cross-border financial market participants away from national regulators and toward the European Securities and Markets Authority (ESMA), based in Paris.
Entities covered include major trading venues, central counterparties, central securities depositories, and crypto-asset service providers.
The ECB stated in its formal opinion:
“The ECB fully supports the Commission proposals, which constitute an ambitious step towards deeper integration of capital markets and financial market supervision within the Union.”
ECB’s conditions and role
While supportive, the ECB stressed that ESMA must receive sufficient staffing and financial resources before taking on expanded responsibilities.
It also recommended that the transition from national to EU-level supervision be carefully sequenced to minimize disruption to markets.
The central bank further requested a non-voting seat on ESMA’s board, arguing its expertise should inform not just supervisory decisions but also technical standards, guidelines, and recommendations.
What comes next
The ECB’s endorsement is expected to reassure markets and smaller EU member states like Ireland and Luxembourg, which have been lukewarm on the plan.
The proposal now enters negotiations between EU governments and the European Parliament, a process expected to take several months before any framework becomes law.
