EU Central Bank Backs Plan to Centralize Crypto Supervision

The European Central Bank has announced its backing for a plan to centralize the supervision of major cryptocurrency companies within the EU. According to the bank, this move would help to reduce fragmentation and mitigate cross-border risks in crypto-asset markets.

The ECB's opinion highlights the increasing trend of banks linking with crypto companies, which could transmit shocks into the financial system. The central bank argues that a centralized supervisory regime is necessary to address systemic risks posed by large-scale crypto operations.

Under the proposed plan, ESMA would be responsible for overseeing major crypto companies, including those operating across national borders. This would involve transferring authorisation, monitoring, and enforcement powers from national regulators to the EU's financial markets watchdog.