Key points

  • The Council position would move only the most significant cross-border crypto-asset service providers and market infrastructures under direct ESMA supervision.
  • Reuters reported that officials expect roughly 10 to 15 of about 360 EU crypto providers to fall within the initial centralized regime.
  • The measure is not final law: the Council must formally adopt its mandate before negotiations can begin with the European Parliament.

European Union finance ministers have agreed the central elements of a plan to deepen capital-market integration while limiting how far direct supervision shifts from national authorities to the European Securities and Markets Authority. The October 9 Council position covers trading venues, clearing houses, securities depositories and crypto-asset service providers, but it is a negotiating mandate rather than enacted law.

A narrower crypto-supervision threshold

For crypto businesses, the biggest change from the European Commission's original proposal is selectivity. The Commission had sought direct ESMA supervision across a broader group of crypto-asset service providers, or CASPs. The Council says only the most significant providers with meaningful cross-border activity should move immediately to the EU-level regulator. National authorities would continue supervising the rest under the Markets in Crypto-Assets framework.

Related reporting: ESMA Sets Three-Month Limit for Non-MiCA Stablecoin Services

Reuters reported that officials expect the criteria to capture roughly 10 to 15 of around 360 CASPs operating in the bloc. The exact population will depend on the final thresholds and on how institutions negotiate the legislation. For large exchanges and custodians serving several member states, centralized oversight could reduce duplicated supervisory relationships. Smaller or domestically focused firms may see less immediate change.

National regulators retain a larger role

The compromise also reduces the number of traditional market infrastructures expected to move under ESMA. Reuters said the proposed scope now covers six central counterparties instead of nine and 13 securities depositories instead of 15. Criteria for trading venues were refined in a way that leaves several prominent operators, including Deutsche Boerse, under national supervision. The Council calls for a review of the trading-venue framework after two years.

The institutional design is intended to balance EU-wide consistency with local expertise. ESMA would gain a full-time executive board led by its chair and five independent members, while national regulators would keep responsibility for strategy, rulemaking and the budget through the supervisory board. A two-year transition would use joint teams of ESMA and national staff for entities entering direct European supervision.

Broader market reforms travel with the deal

The package also creates a voluntary pan-European status for market operators overseen by ESMA, expands the EU's distributed-ledger pilot regime and gives member states the option to offer a cross-border passport for investment-fund depositaries. Those elements matter to tokenized securities because they affect how experimental blockchain-based trading and settlement systems can operate across borders. The Council presented the measures as part of its savings and investment union agenda.

EU policymakers argue that fragmented supervision and market infrastructure make it harder to direct household savings into productive investment. The Council estimates that households hold about €10 trillion in bank deposits, often at relatively low returns. More integrated markets could widen financing options for companies, but the compromise shows that member states remain cautious about transferring authority over nationally important exchanges and financial institutions to a central supervisor.

What happens next

The agreement does not immediately change a firm's regulator or MiCA authorization. The Council still has to finish technical work and formally adopt its negotiating position. Talks can begin only after the European Parliament establishes its own mandate, and the final text may differ. Crypto firms should therefore treat the announced scope as a political direction, not a settled compliance timetable, while monitoring the final significance tests, transition rules and division of supervisory responsibilities.

Sources

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