Core Viewpoint - The European Commission has proposed transferring direct supervision of all crypto asset service providers to the European Securities and Markets Authority (ESMA) to enhance regulatory consistency across the EU [1][2]. Group 1: Regulatory Changes - The new legislative package aims to eliminate regulatory fragmentation across 27 member states by granting ESMA powers similar to those of the U.S. Securities and Exchange Commission [1][2]. - ESMA will directly authorize crypto firms operating across the EU, replacing the previous passporting system [2]. - The framework introduces "Pan-European Market Operator" status to streamline corporate structures into a single licensing format, enhancing ESMA's coordination role in asset management [3]. Group 2: Addressing Risks and Inconsistencies - The changes are positioned as essential for responding to emerging risks and addressing inconsistencies from fragmented national approaches [4]. - The package also aims to amend the DLT Pilot Regulation to increase proportionality and provide legal certainty for blockchain adoption [4]. Group 3: Member States' Perspectives - France supports the centralization of regulatory powers, citing concerns over regulatory loopholes in the current passporting model [5]. - Germany has recently shown openness to expanded ESMA powers, marking a shift from previous opposition [6]. - ECB President Christine Lagarde has endorsed centralized supervision as crucial for European competitiveness against the U.S. [6].