Following his recent commentary on LinkedIn, Dr Ian Gauci shared his analysis on the potential implications of the proposed EU Market Infrastructure Package and its amendments to Regulation (EU) 2023/1114 (MiCA).
The proposal has sparked widespread discussion across Europe’s regulatory and fintech communities. According to Dr Gauci, contrary to media interpretations suggesting that the European Securities and Markets Authority (ESMA) would oversee only “significant” crypto-asset service providers (CASPs), the proposal indicates a far broader mandate.
“It’s not true that ESMA wants to regulate only significant CASPs as portrayed in the media,” Dr Gauci stated. “Should this package go through, ESMA shall be responsible for the supervision and enforcement of this Regulation with respect to all crypto-asset service providers.”
Under the proposed framework, ESMA would become the default supervisor of all CASPs, while national authorities would act mainly through delegation - powers that are temporary, optional, and revocable at ESMA’s discretion.
This, Dr Gauci explains, would mark a fundamental shift in the supervisory balance between EU and national authorities:
“Every MiCAR authorisation, supervisory file, and inspection could now sit under ESMA’s roof. National authorities such as the MFSA, AMF, BaFin, and CNMV would become executors of ESMA mandates — potentially erasing years of national investment in capacity, staff, licensing, and governance.”
Describing the proposal as “worse than the SSM under banking,” Dr Gauci cautions that this development risks undermining Member State sovereignty and the principle of subsidiarity, setting a precedent that could extend to other EU-regulated sectors.
The discussion highlights an emerging tension between harmonisation and centralisation within the EU’s regulatory framework, raising important questions about the future of local supervision and governance in the digital finance era.
GTG will continue to monitor and analyse the evolution of the EU Market Infrastructure Package and its implications for MiCA implementation and national supervisory authorities.