EU Central Bank Backs Plan to Consolidate Crypto Oversight

The European Central Bank has backed the European Commission's proposal to bring major cryptocurrency companies under the supervision of the EU's financial markets regulator.

According to an opinion published by the ECB, transferring the oversight of systemically important cross-border capital market companies, including large trading platforms and crypto companies, to ESMA would ensure supervisory convergence, reduce fragmentation, and mitigate cross-border risks in crypto-asset markets.

The central bank noted that banks are increasingly linking with crypto companies, which could transmit 'shocks into the financial system' from crypto. The trend underscores the need for a centralized Union supervisory regime for CASPs, capable of addressing systemic risks posed by CASPs with significant activities.