Today in crypto, the European Union is moving to expand its oversight of digital asset companies. Crypto funds saw strong inflows amid worries over the US government shutdown, and a Multicoin Capital executive said the Genius Act could finally give traditional banks a run for their money.
EU eyes crypto oversight under ESMA to end fragmented supervision
The European Union’s markets regulator is preparing to expand its authority to cover cryptocurrency exchanges and other operators, a move officials say would better align oversight with the bloc’s newly implemented Markets in Crypto-Assets (MiCA) framework.
Verena Ross, chair of the European Securities and Markets Authority (ESMA), confirmed in an interview with the Financial Times that the European Commission is developing plans to shift supervision of several financial sectors, including crypto, from national regulators to ESMA.
Ross said the reform would help build “a more integrated and globally competitive” EU financial landscape. The proposal aims to address “continued fragmentation in markets” and move closer to a unified capital market across Europe, she said.
Under the current MiCA regime, licences for crypto-asset service providers are issued by national authorities rather than a central EU body.
Smaller member states have so far led the rollout. Lithuania granted its first license to discount brokerage Robinhood Europe earlier this year, while Malta has authorized major exchanges, including OKX and Crypto.com. In Luxembourg, Bitstamp and Coinbase have also secured MiCA licences.
Ross argued that delegating supervision to individual countries has created inefficiencies, forcing each national authority to build its own expertise and oversight systems. ESMA has also raised concerns about inconsistent licensing standards, including a July review that criticized elements of Malta’s authorization process.
Crypto funds smash records with $5.95 billion inflows amid shutdown concerns
Cryptocurrency investment products recorded their highest-ever inflows last week, as the US government shutdown fueled a rally in spot crypto markets.
Global crypto exchange-traded products (ETPs) recorded $5.95 billion of inflows in the week ending Friday — the largest ever seen — CoinShares reported on Monday.
“We believe this was due to a delayed response to the FOMC [Federal Open Market Committee] interest rate cut, compounded by very weak employment data […], and concerns over US government stability following the shutdown,” CoinShares’ head of research, James Butterfill, said.
The record inflows came amid an overall bullish trend in crypto markets, which led to Bitcoin (BTC) registering a new historic high above $125,000 on Saturday.
With inflows reaching $5.95 billion, crypto ETPs surpassed the previous $4.4 billion record from mid-July by 35%.
Unlike the previous record inflows, which were almost equally distributed between Bitcoin and Ether (ETH), the latest gains were heavily dominated by BTC, with Bitcoin funds attracting a record-breaking $3.6 billion.
“Despite prices closing in on all-time highs during the week, investors did not choose to buy short investment products,” CoinShares Butterfill noted.
Ether ETPs saw inflows totaling $1.48 billion, pushing year-to-date inflows to another record of $13.7 billion, which was close to triple that of last year, Butterfill said.
Solana (SOL) ETP inflows ranked third at $706.5 million, while XRP (XRP) added $219.4 million, with both setting records, according to CoinShares.
GENIUS Act could mark the end of the banking rip-off: Multicoin
The stablecoin-focused GENIUS Act, which was enacted in July, will trigger an exodus of deposits from traditional bank accounts into higher-yield stablecoins, according to the co-founder of Multicoin Capital.
“The GENIUS Bill is the beginning of the end for banks’ ability to rip off their retail depositors with minimal interest,” Multicoin Capital’s co-founder and managing partner, Tushar Jain, posted to X on Saturday.
“Post Genius Bill, I expect the big tech giants with mega distribution (Meta, Google, Apple, etc) to start competing with banks for retail deposits,” Jain added, arguing that they would offer better stablecoin yields with a better user experience for instant settlement and 24/7 payments over traditional banking players.
He noted that banking groups tried to “protect their profits” in mid-August by calling on regulators to close a so-called loophole that may allow stablecoin issuers to pay interest or yields on stablecoins through their affiliates.
