ESMA Shifts Focus from Rulemaking to Supervision of Cryptocurrency Regulations

The European Securities and Markets Authority (ESMA) is shifting its focus from designing rules for cryptocurrencies to enforcing them in a more consistent way. According to ESMA Chair Verena Ross, the regulator's attention has shifted 'from rulemaking towards supervision and convergence.'

This change in focus aims to align how national regulators oversee crypto asset service providers (CASPs) as implementation deepens under the Markets in Crypto-Assets Regulation (MiCA). The ESMA 2027 work program highlights key areas for supervisory convergence, including operational resilience, outsourcing risks, liquidity, reverse solicitation, and asset classification.

The regulator plans to standardize parts of the supervisory workflow by harmonizing CASPs' periodic reporting to national regulators, developing common risk indicators, and promoting supervisory dashboards that can support monitoring across countries. ESMA also expects its centralized system, MIDAS, to become fully operational in 2027, with a first phase targeted for full operation.

The shift towards supervision and convergence is expected to influence how regulations evolve under the MiCA review, which is expected by June 2027. Supervisory findings often shape what lawmakers consider during the review process, making this development significant for market participants.