France Pushes EU to Give ESMA Direct Power Over Crypto Giants

Paris wants Europe’s top markets regulator, ESMA, to take control of supervising major crypto firms — aiming to close loopholes, tighten stablecoin rules, and prevent regulatory arbitrage across the bloc.

⚡ Quick Hits

• 🇫🇷 France calls for ESMA oversight of top EU crypto firms.
• 🪙 Target: Stablecoins and cross-border issuers operating under MiCA.
• 🧩 Problem: Firms licensed in one country can “passport” services across the EU — creating uneven supervision.
• 🧠 ESMA already flagged issues in Malta, proving current national oversight isn’t enough.
• 🌍 Goal: A unified EU crypto market with consistent, central supervision.

🏛️ France Steps In — And Turns Up the Heat

France has urged the European Union to hand the European Securities and Markets Authority (ESMA) direct supervisory control over the bloc’s biggest crypto firms — a major shift in how digital assets could be governed under MiCA (Markets in Crypto-Assets).

Governor François Villeroy de Galhau of the Bank of France sounded the alarm Thursday, warning that the current “passporting” system — where firms licensed in one EU state can operate across all others — leaves dangerous regulatory gaps.

“MiCA’s structure risks fragmentation,” Villeroy said. “We need ESMA to oversee major players directly to ensure stability and fairness.”

💶 Stablecoins at the Center of the Storm

France’s push centers on stablecoins — the backbone of crypto liquidity and DeFi ecosystems. Officials warn that multi-issued stablecoins (like those released in both the EU and U.S.) could trigger systemic risks if not uniformly supervised.

Issuers such as Circle (USDC) and Paxos currently operate under MiCA’s flexible model. Circle, notably, obtained an e-money license in France last year, making Paris its European headquarters.

But as France sees it, that flexibility cuts both ways — opening doors to inconsistent capital backing, risk monitoring, and transparency across jurisdictions.

“Without harmonized supervision, we risk importing instability,” said one official at the French Ministry of Finance.

🧠 Why ESMA Matters

ESMA already oversees Europe’s biggest financial markets, from clearing houses to credit agencies. Transferring crypto supervision to ESMA would mean:

• Direct EU-level oversight for systemically significant crypto firms.
• Unified reporting, audit, and reserve requirements.
• Faster coordination on cross-border investigations.

The European Commission is already drafting reforms that could expand ESMA’s authority over stock exchanges, stablecoin issuers, and digital asset custodians — essentially making ESMA the crypto sheriff of Europe.

⚠️ Malta’s Wake-Up Call

France’s timing isn’t random. In July 2025, ESMA conducted a peer review of Malta’s crypto licensing regime — and the results weren’t flattering.

The report found that Malta’s MFSA (Financial Services Authority) only “partially met expectations” in vetting crypto asset service providers (CASPs). Some were approved despite “material unresolved issues.”

That revelation reinforced fears that member-state discretion leads to inconsistent standards — a risk France wants to eliminate before MiCA scales up fully in 2026.

🌍 The Bigger Picture

This move places France at the forefront of Europe’s battle for crypto governance. While some nations — like Malta, Lithuania, and Cyprus — built reputations as crypto-friendly licensing hubs, France is positioning itself as the voice of prudence and stability, pushing for a centralized, institutional-grade framework.

If successful, ESMA’s expanded authority could: ✅ Strengthen investor confidence in EU-based crypto operations. ✅ Prevent “license shopping” and uneven enforcement. ✅ Attract global capital seeking regulated crypto infrastructure.

But it could also raise tension among smaller EU states that fear losing regulatory autonomy — a familiar friction in the bloc’s integration story.

TL;DR

• 🇫🇷 France wants ESMA — not national regulators — to directly supervise Europe’s biggest crypto firms.
• 💶 Stablecoins are the top concern amid fears of multi-issuance risks and market fragmentation.
• 🧩 Malta’s weak licensing oversight triggered renewed calls for EU-wide consistency.
• 🏦 The proposal aligns with MiCA’s next evolution: a single, centralized regulator for digital assets.
• 🌍 If adopted, ESMA could become the anchor of Europe’s crypto market stability.