Too early to centralise crypto supervision at EU level – MFSA

The Malta Financial Services Authority (MFSA) has voiced its opposition to proposals for centralising the supervision of key Crypto-Asset Service Providers (CASPs) at EU level, arguing that the Markets in Crypto-Assets (MiCA) Regulation has only been in force for nine months – too soon, it says, to properly assess its impact.

The MiCA framework, introduced in 2023 and formally enacted in December 2024, aims to unify crypto regulations across the bloc.

By implementing a single regulatory structure, the EU intends to enhance transparency, consumer protection, and security within the cryptocurrency sector while providing businesses with greater clarity on compliance requirements.

“Now is not the appropriate moment to introduce additional layers of supervision that could potentially hinder competitiveness and innovation within the digital assets market,” the regulator said in its statement.

The MFSA stressed that its priority remains fostering a resilient and competitive financial sector, warning that EU-level initiatives should focus on strengthening competitiveness rather than introducing additional layers of bureaucracy.

It highlighted the work of the European Securities and Markets Authority (ESMA), particularly through its Digital Finance Standing Committee, which is driving supervisory convergence and tackling risks such as regulatory and supervisory arbitrage.

The MFSA said it “highly values” these initiatives and called for their reinforcement to better address emerging challenges.

The authority also underlined its commitment to implementing the recommendations set out in the recently concluded ESMA Peer Review on CASP Authorisation and Supervision.

It confirmed it is keeping both ESMA and other national supervisors updated on its progress, describing peer reviews as an essential tool in harmonising supervisory practices across member states.

Reaffirming its position, the MFSA said it remains committed to collaborative supervision, constructive dialogue and supervisory excellence, while working to safeguard market integrity and support innovation and growth in Malta’s financial services sector.