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At the recent ACPR-AMF fintech conference in Paris, an idea was floated that could change the approach to crypto control in the European Union. The head of the French Central Bank, Francois Villeroy de Galo, has proposed transferring more power to the European Securities and Markets Authority (ESMA) to monitor crypto companies operating in the EU.

The key difficulty of the current control system lies in the disparate application of standards in different member States of the Union. Despite the fact that the MiCA regulation sets uniform requirements for the crypto industry, their implementation remains the responsibility of national authorities. According to experts from the Bank of France, this model poses risks to the stability of the financial system of the entire European Union.

Of particular concern is the regulation of stablecoins, in particular those pegged to the US dollar. The current rules allow companies issuing cryptocurrencies to create similar tokens both within the EU and abroad, using partial backup. According to the regulatory authorities, this could lead to serious systemic threats to the European financial system.

A month ago, Chiara Scotti, deputy governor of the Bank of Italy, expressed similar concerns, stressing that although stablecoins issued by different companies potentially increase liquidity, they also raise serious legal issues, especially when the issuing companies are outside the jurisdiction of the EU.

Transferring oversight powers to ESMA seems like a logical solution in the current situation. A single regulator will be able not only to develop common rules, but also to respond quickly to cross-border risks. This is especially important in light of the fact that the development of technology is faster than the capabilities of control authorities at the national level.