Core Viewpoint - The European Commission is proposing to transfer direct supervisory authority over crypto exchanges, stock exchanges, and clearing houses to the European Securities and Markets Authority (ESMA) to enhance regulatory consistency across the EU and strengthen the capital markets union [1][2]. Group 1: Regulatory Changes - ESMA would oversee significant cross-border entities, including crypto asset service providers currently regulated by national authorities under the Markets in Crypto-Assets (MiCA) framework [2]. - The initiative has received support from key figures such as ECB President Christine Lagarde and former President Mario Draghi, emphasizing the need for centralized supervision to enhance European competitiveness against the U.S. [2]. Group 2: Market Efficiency - The existing regulatory framework has led to inefficiencies, as national regulators in all 27 member states have developed separate crypto supervision frameworks, which are described as duplicative and costly [3][4]. - ESMA chair Verena Ross highlighted the challenges of achieving alignment among national supervisors, indicating that resources have been unnecessarily duplicated across member states [4]. Group 3: Inconsistencies in Supervision - A peer review by ESMA revealed that Malta's Financial Services Authority only "partially met expectations" in authorizing crypto asset service providers, indicating unresolved issues during the approval process [5]. - The consistent application of MiCA is deemed essential for standardizing the licensing and supervision of crypto firms across the EU [5]. Group 4: Member State Support - Germany's government has recently shown openness to centralized oversight, contrasting its previous opposition, while France remains a strong supporter, warning of regulatory loopholes in the current passporting system [6]. - Bank of France Governor François Villeroy de Galhau emphasized the need for stricter regulation of stablecoin issuance to mitigate arbitrage risks during periods of market stress [7].