Bank of France Pushes for Stronger EU Crypto Oversight via ESMA Amid Stablecoin Concerns

By: crypto insight|2025/10/09 13:40:05
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Imagine the European Union as a bustling marketplace where digital currencies flow like rivers, but without a unified guard to watch over them. That’s the picture painted by recent calls from the Bank of France, highlighting how fragmented rules could leave the bloc vulnerable. As crypto assets grow, so do the worries about maintaining control and fairness. Let’s dive into why France’s central bank is advocating for a centralized approach under the European Securities and Markets Authority (ESMA), and what this means for stablecoins that could shake the euro’s foundation.

Why ESMA Should Take the Lead in EU Crypto Regulation

Picture ESMA as the vigilant sheriff in a vast Wild West of crypto markets—that’s the role the Bank of France envisions for it. During a key fintech forum in Paris back on that Thursday, Governor François Villeroy de Galhau made a compelling case for handing direct supervision of major crypto firms to this Paris-based authority. He argued that sticking with national regulators might lead to inconsistent enforcement, much like having different speed limits on the same highway, which could confuse drivers and cause accidents.

This push aligns with broader efforts to safeguard the EU’s financial sovereignty. Villeroy de Galhau emphasized that ESMA’s oversight would ensure uniform application of the Markets in Crypto-Assets (MiCA) framework, reducing risks and promoting a level playing field. It’s not just about rules; it’s about building trust in a system where crypto companies are expanding fast across borders. By centralizing power, the EU could avoid the pitfalls of regulatory arbitrage, where firms shop around for the laxest overseer, ultimately protecting investors and fostering innovation.

Supporting this, data from recent EU reports shows that crypto market capitalization in the region has surged to over €500 billion as of October 2025, underscoring the need for robust governance. Real-world examples, like the smooth integration of MiCA in countries with strong enforcement, contrast sharply with delays in others, proving that unified supervision isn’t just ideal—it’s essential for stability.

Stablecoins Pose a Real Threat to EU Monetary Sovereignty

Now, let’s talk about stablecoins, those digital anchors tied to currencies like the dollar, which the Bank of France sees as potential storm clouds over the euro. Villeroy de Galhau didn’t mince words, pointing out how MiCA’s rules on multi-issuance—allowing the same stablecoin to be issued both inside and outside the EU with only partial reserves—create vulnerabilities. It’s like building a bridge with half the supports; it might hold for a while, but stress could lead to collapse.

He warned that this setup could erode the euro’s dominance, fostering dependence on foreign entities and unregulated systems. Echoing this, officials like Italy’s Chiara Scotti highlighted on September 19 that while multi-issuance boosts liquidity, it amps up legal and operational risks, especially from non-EU issuers. The European Systemic Risk Board (ESRB) amplified these concerns on October 1, recommending a ban on the practice to curb systemic threats, even if it’s not binding yet.

Fast-forward to the latest updates as of October 9, 2025: Recent Twitter discussions have exploded around #MiCA and #Stablecoins, with users debating the ESRB’s stance. A viral post from a prominent EU finance analyst noted, “ESRB’s call to end multi-issuance is a game-changer—could save the euro from dollar dominance!” Official announcements from the European Commission indicate ongoing reviews, with plans to tighten MiCA by early 2026, based on consultations that wrapped up last month. Google searches for “EU stablecoin regulations” have spiked 40% in the past quarter, often paired with questions like “How do stablecoins affect the euro?” This reflects growing public interest in how these assets might reshape monetary policy.

To put it in perspective, compare stablecoins to traditional banks: Just as banks back deposits with reserves, stablecoins promise stability but often fall short without strict rules. Stricter regulations, as Villeroy de Galhau suggests, would minimize arbitrage in turbulent times, drawing from evidence like the 2022 crypto winter where under-reserved tokens crumbled, costing investors billions.

Tackling Passporting Challenges for Unified Crypto Supervision

Under MiCA, the passporting system lets licensed crypto firms operate EU-wide with approval from just one member state—think of it as a universal key unlocking every door in the union. It’s meant to streamline the market, but as Villeroy de Galhau noted, inconsistencies in national oversight could turn this into a weak link.

Critiques have surfaced, such as ESMA’s July findings on Malta’s partial compliance in licensing, which sparked fears of ripple effects. France’s AMF echoed this on September 15, hinting at potentially blocking passporting if gaps persist. These issues underscore the need for ESMA’s direct role, aligning with the Commission’s October 2025 push for integrated financial supervision to boost competitiveness.

In terms of brand alignment, this regulatory evolution presents opportunities for platforms that prioritize compliance and user trust. For instance, aligning with EU standards can enhance a brand’s reputation, much like how WEEX exchange has positioned itself as a reliable player in the crypto space. With its focus on secure, user-friendly trading and adherence to global best practices, WEEX stands out by offering seamless access to stablecoins and other assets, empowering traders to navigate regulations confidently without compromising on innovation or security.

The narrative here is clear: Stronger, unified regulation isn’t about stifling growth; it’s about nurturing a resilient ecosystem. As crypto evolves, these steps could prevent crises, drawing from past events where lax oversight led to market upheavals.

FAQ

What is MiCA and how does it regulate stablecoins in the EU?

MiCA, or Markets in Crypto-Assets, is the EU’s framework for overseeing crypto activities, including stablecoins. It sets rules for issuance, reserves, and operations to ensure stability, but recent discussions highlight needs for tighter controls on multi-issuance to protect monetary sovereignty.

Why is the Bank of France concerned about dollar-backed stablecoins?

These stablecoins could undermine the euro by increasing reliance on non-EU issuers and creating unregulated payment systems. Officials warn this might lead to fragmented financial landscapes, with evidence from market data showing rapid growth in such assets.

How would ESMA’s direct supervision benefit EU crypto markets?

By centralizing oversight, ESMA could enforce consistent rules, reduce arbitrage, and enhance investor protection. This approach, supported by recent EU reports, aims to build a more integrated and competitive market, preventing uneven enforcement across member states.

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