ESMA-led collaboration : an alternative to centralised supervision of cryptoassets

Abstract

This article, which serves as a continuation of the author's previous piece, presents an alternative to the centralisation of supervision of cryptoasset service providers (CASPs), currently under consideration in Europe. It proposes a framework based on ‘knowledge sharing in financial supervision,’ and emphasises the strategic use of existing cooperative mechanisms and convergence tools by the European Securities and Markets Authority (ESMA). Although centralised supervision offers benefits such as consistent enforcement and economies of scale, it often fails to address the diverse national contexts, market particularities, and swiftly changing technological environments characteristic of a developing financial system.

The proposed framework advocates for greater collaboration among national financial supervisors, supported by the ongoing development and application of standardised guidelines/supervisory briefings, training programs to enhance knowledge sharing, systematic peer review processes, and common supervisory actions (CSAs). The core argument of this article is that strengthening collaborative and convergence efforts provides a robust and flexible framework for managing the complexities of cryptoasset market. This approach would encourage continuous learning, fosters innovation, and builds mutual trust among financial supervisors.