Europe’s crypto regulatory landscape is undergoing increased scrutiny as policymakers deliberate whether the enforcement of the Markets in Crypto-Assets (MiCA) regulation ought to transition from national authorities to the European Securities and Markets Authority (ESMA).

MiCA, which began to take effect at the start of 2025, aims to establish a cohesive rulebook for crypto-asset service providers throughout the EU.

As the implementation advances, noticeable differences among member states are becoming difficult to overlook. While some regulators have issued numerous licenses, others have only managed a handful, raising concerns about inconsistent oversight and regulatory evasion.

In this week’s Byte-Sized Insight episode, Cointelegraph discussed the implications of these challenges for Europe’s crypto marketplace with Lewin Boehnke, Chief Strategy Officer at Crypto Finance Group, a digital asset enterprise based in Switzerland, operating across the EU.

Disparities in Enforcement Ignite Demands for Centralized Oversight

Boehnke argues that the primary challenge in Europe lies not within the MiCA regulations themselves, but in their varied application across different jurisdictions.

“There is a very, very uneven application of the regulation,” he noted, highlighting contrasts among member states. For instance, Germany has issued roughly 30 crypto licenses, predominantly to established banks, whereas Luxembourg has approved only three licenses, all to prominent firms.

The ESMA issued a peer review regarding the Malta Financial Services Authority’s approval of a crypto service provider, concluding that the regulator only “partially met expectations.”

These inconsistencies have driven some regulators and policymakers to advocate for the transfer of supervisory authority to the ESMA, envisaging a centralized enforcement strategy akin to that of the US Securities and Exchange Commission.

France, Austria, and Italy have expressed their support for this move, especially in light of criticism directed at more lenient regulatory environments in other parts of the bloc.

From Boehnke’s viewpoint, centralization might focus more on efficiency than control.

“From just purely the practical point of view, I think it would be a good idea to have a unified… application of the regulation,” he said, mentioning that direct communication with the ESMA could alleviate delays arising from interactions among national regulators.

Praise for MiCA’s Framework Amid Ongoing Technical Challenges

Despite certain criticisms from segments of the crypto industry, Boehnke maintains that MiCA’s fundamental design is robust, particularly its intention to regulate intermediaries rather than peer-to-peer transactions.

“I do like MiCA regulation… the overarching approach of regulating not necessarily the assets, not the peer-to-peer use, but the custodians and the ones that offer services… that is the right approach.”

However, he acknowledges that lingering technical uncertainties hinder adoption, particularly for banking institutions. One such issue pertains to MiCA’s stipulation that custodians must be capable of returning client assets “immediately,” a term that remains subject to various interpretations.

“Does that mean withdrawal of the crypto? Or is it good enough to sell the crypto and withdraw the fiat immediately?” Boehnke questioned, recognizing that these ambiguities are still under discussion and await clarification from ESMA.

To listen to the comprehensive discussion on Byte-Sized Insight, tune in to the complete episode on Cointelegraph’s Podcasts page, on Apple Podcasts, or Spotify. Additionally, don’t forget to explore Cointelegraph’s full roster of other shows!

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