France has urged the European Union to give its top markets regulator, the European Securities and Markets Authority (ESMA), direct authority over major cryptocurrency firms operating across the bloc.
Key Takeaways:
- France wants the EU’s top markets regulator, ESMA, to directly oversee major crypto firms.
- Bank of France Governor François Villeroy de Galhau called for tighter control over stablecoins.
- The proposal comes amid EU efforts to centralize supervision and strengthen financial stability.
Speaking Thursday, Bank of France Governor François Villeroy de Galhau said the move would ensure consistent supervision and enforcement of crypto regulations under the EU’s Markets in Crypto-Assets (MiCA) framework.
He warned that the current system, which allows companies to obtain licenses from individual member states and “passport” them across the EU, risks regulatory loopholes and uneven oversight.
France Urges Stricter EU Rules on Cross-Border Stablecoin Issuance
“This framework would benefit from much stricter regulation of the multi-issuance of the same stablecoin within and outside the European Union, to reduce arbitrage risks in times of stress,” he said.
The comments come as the European Central Bank gains support for restricting cross-border stablecoin issuance, potentially setting up a clash with issuers such as Circle and Paxos, which currently operate under MiCA’s multi-issuance provisions.
Circle, the issuer of USDC, Europe’s largest dollar-pegged stablecoin, relies on this model to manage both EU-based and overseas tokens.
The firm received an electronic money license in France last year, positioning the country as a hub for its European operations.
Stablecoins are seen as crucial to digital finance but also pose systemic risks if not properly backed.
Under MiCA, licensed issuers must hold reserves in at least one EU country, yet can simultaneously issue equivalent tokens abroad, a structure France now argues needs stricter supervision to protect financial stability and prevent market fragmentation.
As reported, the European Commission is preparing sweeping changes that could hand over direct supervisory authority of stock exchanges, cryptocurrency firms, and clearing houses to the EU’s markets watchdog, the ESMA.
Verena Ross, chair of ESMA, told the Financial Times that the proposed changes aim to resolve persistent fragmentation across the EU’s financial sector and create a more unified capital market.
“This would provide a key impetus towards having a capital market in Europe that is more integrated and globally competitive,” she said.
Under the proposals, regulation of several financial market sectors currently overseen by national authorities would shift to ESMA.
ESMA Flags Gaps in Malta’s Crypto Licensing
In July, ESMA raised concerns about Malta’s crypto licensing process, following a peer review of the Malta Financial Services Authority (MFSA).
While acknowledging that the MFSA has adequate staffing and sector expertise, the review found that Malta only “partially met expectations” in its authorization of a crypto asset service provider (CASP), with several material issues left unaddressed during the approval stage.
The review, initiated in April 2025 by ESMA’s Peer Review Committee, focused on the MFSA’s supervisory setup, authorization procedures, and oversight tools.
ESMA emphasized that consistency across EU member states is essential under the MiCA regulatory framework, which seeks to standardize how crypto firms are licensed and supervised throughout the bloc.
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