France's MiCA Strategy: Centralizing EU Crypto Oversight via ESMA

The European Union's Markets in Crypto-Assets (MiCA) regulation, set to reshape the crypto landscape, faces evolving dynamics as member states, including France, push for centralized oversight under the European Securities and Markets Authority (ESMA). France has emerged as a vocal advocate for positioning itself as a crypto-friendly hub under MiCA, leveraging ESMA's role to harmonize regulatory standards across the bloc. This aligns with broader EU efforts to establish a unified framework for crypto assets, with ESMA tasked with maintaining a central register of compliant entities and white papers by December 2024.

Key provisions of MiCA, which came into effect for crypto-asset service providers (CASPs) on December 30, 2024, mandate stringent consumer protections, market abuse detection, and prudential standards. ESMA's final guidelines, released in December 2024, clarify the classification of crypto assets as financial instruments, ensuring consistent application of MiCA across member states. France's proactive stance reflects its ambition to attract crypto firms by streamlining licensing processes and fostering a clear regulatory environment, a strategy that mirrors its historical role in financial innovation.

A critical component of MiCA is the transitional period, which allows firms operating under national laws until July 2026 to continue services while awaiting MiCA authorizations. This phase, however, leaves consumers without full regulatory protections, as providers not yet ESMA-registered remain subject to localized, non-uniform rules. The European Supervisory Authorities (EBA, EIOPA, and ESMA) have repeatedly warned of heightened risks during this period, urging investors to verify provider authorizations and asset types to avoid exposure to unregulated services.

France's push for centralized oversight under ESMA intersects with broader EU concerns about multi-issuance stablecoins, which are jointly issued in the EU and other jurisdictions. The European Systemic Risk Board (ESRB), chaired by ECB President Christine Lagarde, has recommended banning such tokens to mitigate financial stability risks. France, alongside Germany and Italy, has supported this move, arguing that multi-issuance models could destabilize the EU's monetary system by prioritizing dollar-denominated reserves over local safeguards. The ESRB's non-binding recommendation adds pressure on regulators to either adopt restrictions or justify alternative risk-mitigation strategies.

Despite these efforts, challenges persist in achieving regulatory consistency. National authorities, including France's, face scrutiny over potential regulatory arbitrage, where firms may seek jurisdictions with lighter oversight. Critics, such as compliance expert Jerome Castille, highlight that uneven implementation of MiCA could undermine the single market's integrity, echoing past issues with MiFID-era regulations. Smaller firms, in particular, struggle with compliance burdens, raising concerns about market fragmentation and reduced innovation.

The EU's dual strategy-curbing foreign stablecoins while advancing a digital euro-further complicates the regulatory landscape. A consortium of nine European banks plans to launch a MiCA-compliant euro-backed stablecoin in 2026, aiming to counter dollar-dominated alternatives. Meanwhile, the ECB's digital euro initiative, expected to launch in 2029, seeks to preserve monetary sovereignty amid growing stablecoin adoption. France's alignment with these efforts underscores its broader vision of a sovereign, tech-driven financial ecosystem.

[4] European Regulatory Affairs as MiCA Takes Effect (https://www.elliptic.co/blog/crypto-regulatory-affairs-as-mica-takes-effect-esma-releases-final-guidance)

[6] Laying the Groundwork for a Digital Euro (https://dzilla.com/laying-the-groundwork-for-a-digital-euro-eus-push-to-ban-multi-issuance-stablecoins-and-reinforce-monetary-sovereignty)