France Pushes for Tougher EU Crypto Oversight
Europe’s crypto market may face tighter regulation in the coming months. François Villeroy de Galhau, governor of the French central bank, has urged the EU to grant supervisory powers over major crypto companies to the European Securities and Markets Authority (ESMA). He argues that unified oversight is needed to prevent firms from choosing countries with the loosest rules. He also warned that current stablecoin regulations contain loopholes that could weaken the euro in the long term.
Fragmented supervision poses a risk
Currently, crypto companies in the EU are regulated by national authorities. In practice, some countries enforce strict oversight, while others are much more lenient. Villeroy de Galhau noted that this approach leads to market inequality and enables regulatory arbitrage — firms can choose the easiest jurisdiction for licensing and then expand across the EU’s single market.
According to him, supervision should be transferred to ESMA to ensure consistent and fair enforcement across all member states. The move is part of the European Commission’s broader plan to shift oversight of selected financial sectors, including crypto, from the national to the EU level.
Stablecoins seen as a threat to the euro
In his Paris speech, Villeroy also focused on stablecoins, particularly those pegged to the U.S. dollar. The current MiCA (Markets in Crypto-Assets) framework allows multiple issuers of the same stablecoin, even outside the EU, and does not require full reserves. He called this a “regulatory weakness” that could increase Europe’s dependence on foreign issuers and undermine the euro.
France is not alone in its concerns. Italy’s central bank and the European Systemic Risk Board (ESRB) have both warned of the risks of such a setup, suggesting that issuing stablecoins from outside the EU should be banned altogether. While the ESRB’s advice is not legally binding, it adds pressure on policymakers to tighten stablecoin rules.
MiCA aims for unity but still has gaps
MiCA is designed to create a single regulatory framework for crypto assets across the EU, making it easier for companies to operate under one license (“passporting”) throughout the bloc. However, this advantage also exposes weaknesses: if one country’s regulation is too soft, the entire EU market can be undermined.
This issue has already surfaced. ESMA recently criticized Malta for its lax licensing process, and France’s AMF warned that continued regulatory disparities could call the validity of EU passporting into question.
ESMA Chair Verena Ross supports the idea, saying that centralizing supervision would make Europe’s crypto market stronger, more competitive, and safer.
Sources:
https://cointelegraph.com/news/european-union-stablecoin-ban-report
https://www.ft.com/content/36bd279c-215e-4582-90ff-7efd6bfa54ea
https://cointelegraph.com/news/bank-france-esma-mica-stablecoin-rules