The Bank of France has called for tighter EU-level supervision of cryptocurrency firms, arguing that the current system under the Markets in Crypto-Assets (MiCA) framework leaves too much regulatory discretion to individual member states. Governor François Villeroy de Galhau said the European Securities and Markets Authority (ESMA) should take over the direct oversight of major crypto firms to ensure consistent rules and protect financial stability across the bloc.
Speaking on Thursday, Villeroy warned that allowing firms to operate across all 27 EU nations through a “passporting” license—obtained in just one member state—creates uneven enforcement and increases exposure to market risks. He specifically pointed to the growing concern around stablecoins issued simultaneously within and outside the EU, which he said could amplify arbitrage and liquidity risks during times of stress.
“The framework would benefit from much stricter regulation of the multi-issuance of the same stablecoin within and outside the European Union to reduce arbitrage risks in times of stress,” Villeroy stated, according to Bloomberg. His comments echo the European Central Bank’s (ECB) earlier stance advocating for tighter controls, including a possible ban on jointly issued stablecoins across jurisdictions.
The remarks come as global stablecoin issuers such as Circle Internet Group Inc. expand their presence in the EU. Circle, which issues the $76 billion USDC stablecoin, operates under an electronic money license granted in France, allowing it to issue tokens in Europe while maintaining a similar structure internationally. Critics of the current framework argue that such cross-jurisdictional issuance could blur regulatory boundaries and complicate crisis management.
However, Villeroy’s call for stronger restrictions has met resistance from the crypto industry. Earlier this week, several associations representing crypto and payments companies sent a letter to the European Commission opposing potential new rules limiting multi-jurisdictional stablecoin issuance. They warned that changing the existing structure could undermine innovation and push Europe behind other regions in digital finance competitiveness.
The letter emphasised that the current cross-border model has supported nearly the entire stablecoin market, enabling seamless international transactions and liquidity. Tightening these rules, they argued, would fragment the market and stifle growth for legitimate European crypto businesses. So far, the European Commission has not publicly responded to the industry’s concerns, but the debate underscores the tension between regulatory caution and market competitiveness within the EU’s evolving crypto landscape.
For Villeroy and the Bank of France, centralising supervision under ESMA is a crucial step toward preventing regulatory loopholes and ensuring that Europe maintains a unified, credible approach to digital asset oversight. As the MiCA framework prepares for full implementation in 2025, the outcome of this debate will likely shape the future of stablecoin regulation and cross-border crypto operations in the region.
