ECB Backs Centralized Crypto Supervision Under ESMA to Unify EU Oversight

The European Central Bank (ECB) has expanded its support for centralized crypto supervision under ESMA by urging the standardization of asset tokenization infrastructure to ensure interoperability. In a new report, the ECB emphasized that the full benefits of tokenization depend on using central bank money for settlements rather than private stablecoins. Data from the bank indicates that tokenized bonds are already delivering results, notably lowering borrowing costs and tightening bid-ask spreads. While advocating for this shift, the ECB reiterated that ESMA must be equipped with adequate resources to manage the complex risks of Distributed Ledger Technology (DLT). This strategic move aims to unify EU capital markets while providing greater regulatory clarity and financial stability for digital asset firms.