ESMA would have the power to supervise public offerings of cryptocurrencies directly. The application of the AMF proposal would involve using the practice of ESMA for the regulation of cryptocurrencies.
The Financial Markets Authority (AMF) of France proposes a single authority to regulate cryptocurrencies in the European Union.
The European Securities and Markets Authority (ESMA) submits this proposal published in a document. They based the text on the responses to a consultation that the European Union conducted. They recently released the work under the title: “More European supervision and better regulation are key elements to build a true Capital Markets Union.”
ESMA supervises the European markets, seeking to improve the functioning of financial markets and promote cooperation between members of the economic bloc.
The text says that ESMA would directly supervise the Public Offerings of Crypto Assets in the EU and cryptocurrency service providers. Furthermore, it explains that this would create scale economies for national supervisors and concentrate technical know-how efficiently to benefit Europe.
The publication also recommends reducing the aspirations of the nations of the European Union in this regard. That will make it possible to agree on a single regulatory framework that ESMA manages and that allows it to receive the powers.
The document also addresses the governance of ESMA, whose revision it considers necessary to allow a more European decision-making dimension. Likewise, it explains that national authorities constitute the current management framework of the financial system supervisor in the European Union. That limits decision-making to a broader scope, which is a matter of credibility for the European authority.
The AMF believes it is necessary to strengthen the role of the Board of Directors and the independence of ESMA. That would facilitate the making of the different decisions in this environment.
Furthermore, the ESMA administrative structure and source of funding must remain closely linked to its management. In other words, members with less vote will not have as strict a financial obligation as those with higher decision-making power.
It also considers it essential to ensure sufficient flexibility so that ESMA can quickly adjust to the evolution and external finances of the market. It also seeks to adapt to new important projects to adequately fulfill its mission and face the increase in supervisory powers.
On the Way to Complement a Single Regulation
The document also notes the need to complement a single regulation that requires simplifying procedures in Europe and streamlining financial regulation. In this way, there will be greater efficiency in the single market and the competitiveness of the European Union in the world market.
In this regard, it adds that the Commission should systematize choosing regulations instead of directives in the future. That is particularly relevant when they involve financial products that benefit from a European passport.
The text says that efficient European supervision is essential for the capital markets union. They must put it into practice together with the establishment of a single effective regulation. The document indicates that this has not had the expected results through the attempts in legislative matters.
In 2020, the European Commission proposed creating a supervisory agency for cryptocurrencies, which would take effect at the end of that year. That project aimed at creating a team of supervisors with national authorities and EU agencies. The European Banking Authority (EBA) would chair that group and control the cryptocurrency sector in the region.
By Alexander Salazar
