Bank of France advocates for EU crypto oversight under ESMA

The Bank of France has urged the European Union to grant the European Securities and Markets Authority (ESMA) direct supervision over major cryptocurrency firms. Governor François Villeroy de Galhau warned that fragmented oversight could jeopardize the EU's financial sovereignty as crypto companies expand rapidly. He emphasized that national regulators may lead to inconsistent enforcement of regulations across the EU, highlighting a need for a cohesive regulatory approach to ensure the same standards apply to all key players, thus minimizing regulatory arbitrage. Villeroy de Galhau expressed concerns that the current framework allows for the multi-issuance of stablecoins, which could undermine the euro and increase reliance on non-European entities. Other officials, including the Bank of Italy's Deputy Governor, have also called for restrictions on stablecoin multi-issuance due to operational risks. The European Systemic Risk Board recently recommended prohibiting this practice, further indicating a shift towards tighter regulations in the crypto sector. Villeroy de Galhau concluded that stricter regulations would be essential to mitigate risks during times of financial stress.

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