The European Commission’s proposal to grant the European Securities and Markets Authority (ESMA) enhanced powers has sparked debate about the potential for centralized control within the EU’s licensing framework. The proposal seeks to empower ESMA with direct supervisory authority over crypto asset service providers, trading venues, and central counterparties. This move aims to strengthen financial market oversight and reduce regulatory discrepancies among member states. Under the plan, ESMA would take responsibility for monitoring and licensing European crypto and fintech companies, raising concerns about possible delays in licensing and adverse effects on startup growth. The head of public affairs at Morpho expressed worry that consolidating licensing and supervision within a single body could create challenges for innovative new companies. If approved, these reforms would align the EU’s financial market supervision more closely with the centralized model of the U.S. Securities and Exchange Commission (SEC), a concept first proposed by European Central Bank President Christine Lagarde in 2023. The objective is to enhance the competitiveness of the EU’s investment markets, which currently have a market capitalization of approximately $11 trillion compared to the U.S. stock market’s $62 trillion. However, Berken’s legal adviser cautioned that without adequate resources, ESMA’s expanded remit might become unmanageable, causing delays and imposing undue burdens on smaller and newer businesses. The proposal is currently under consideration by the European Parliament and Council.
Source: binance
