Hélène Verhaegen
Brussels, Belgium
Oct 10, 2026

Moving the largest cross-border crypto businesses under the European Securities and Markets Authority would change more than the address of their regulator. It would create a new supervisory tier within the EU’s Markets in Crypto-Assets Regulation, making the definition of a “significant” provider central to how the system operates.

The selective model described for the Council of the European Union’s position on the Market Integration and Supervision Package would leave most crypto-asset service providers, or CASPs, under national supervision. Only providers meeting a designated test of cross-border significance would come under ESMA’s direct oversight. That is a narrower approach than transferring supervision of the entire sector to the EU authority—and its practical consequences would depend on the legislation, not simply the political commitment to centralisation.

What MiCA already requires

Under MiCA, Regulation (EU) 2023/1114, the ordinary authorisation route for a CASP runs through the competent authority in its home member state. Once authorised, a provider can offer services elsewhere in the EU through the regulation’s cross-border notification arrangements, without securing a separate CASP authorisation in every market.

There are important qualifications. Certain already-regulated financial institutions can provide specified crypto-asset services through the notification procedure in Article 60 rather than obtaining a separate authorisation under Article 63. MiCA also distinguishes the supervision of service providers from that of token issuers: the European Banking Authority has responsibilities for significant asset-referenced tokens and significant e-money tokens.

For CASPs, national authorities remain the principal supervisors under the existing framework. ESMA develops regulatory standards, supports supervisory convergence and maintains the relevant registers, but does not have a general mandate to supervise crypto-service providers directly merely because they operate across borders.

A selective transfer would therefore alter the allocation of supervisory responsibility without necessarily replacing MiCA’s underlying conduct, governance and prudential requirements. Whether authorisation itself would also move to ESMA would need to be established in the amending legislation.

The decisive question is who qualifies

“Most significant cross-border providers” is a policy category, not a sufficiently precise legal test. Negotiators would need to determine whether significance turns on customer numbers, transaction volumes, the value of assets held for clients, the geographic spread of business or some combination of those measures.

Those choices can produce substantially different outcomes. A provider with a large domestic business and limited activity abroad may present a different supervisory challenge from a smaller business serving clients across numerous member states. Cross-border reach and financial scale are related, but they are not interchangeable.

The unit of measurement matters just as much. Applying thresholds to each authorised entity could produce a different result from calculating them across a corporate group. The legislation would also need to establish reporting periods, reassessment procedures and arrangements for firms entering or leaving ESMA’s supervisory remit.

For businesses, these are not peripheral drafting questions. They determine which authority can demand information, conduct inspections and take enforcement action—and how much preparation a transfer of supervision would require.

Central supervision would still require national cooperation

Direct ESMA oversight could reduce differences in the treatment of comparable cross-border businesses. It could also concentrate expertise and provide a clearer supervisory lead for groups operating throughout the single market.

But centralisation would not automatically eliminate national involvement. The division of investigatory work, access to local information and cooperation with other authorities would still need explicit rules. Nor would a change in the MiCA supervisor consolidate every obligation a crypto business faces: anti-money-laundering requirements and other applicable legal regimes have their own supervisory arrangements.

The institutional bargain would consequently involve both powers and resources. An EU authority cannot deliver more consistent supervision solely through a broader mandate; staffing, funding, information systems and enforceable cooperation mechanisms would matter too.

Tokenised securities are a separate legislative track

Changes to the DLT Pilot Regime, Regulation (EU) 2022/858, concern a different part of the market. That regime provides a framework for qualifying distributed-ledger-based market infrastructures trading and settling financial instruments, including eligible shares and bonds.

Expanding its eligibility limits or aggregate thresholds could allow larger tokenised-securities activity within the pilot. It would not, by itself, change who supervises CASPs under MiCA. Financial instruments are excluded from MiCA’s scope, making that boundary important when assessing claims about a single EU “crypto” reform.

A Council negotiating mandate would not itself amend either regulation. Changes would require agreement with the European Parliament, formal adoption and application according to the final legislation. A Council position alone would also not establish that trilogue negotiations had begun.

Source and verification note: The supplied account attributes the selective-supervision position to a Council announcement dated 9 October 2026. That announcement and the accompanying negotiating text could not be independently verified here. The proposed changes above are therefore explained conditionally, not reported as a confirmed Council agreement or enacted law.