- The European Commission plans to give ESMA central oversight of stock and crypto exchanges to simplify EU market regulation.
- Christine Lagarde and several EU states support creating a unified “European SEC,” though Luxembourg and Ireland have voiced concerns.
- The proposal is expected in December 2025, with discussions likely extending into 2026 under the EU’s legislative process.
The European Commission is developing a plan to place stock and cryptocurrency exchanges under the direct oversight of the European Securities and Markets Authority (ESMA), seeking to unify supervision across the bloc.
The proposal would see ESMA’s mandate expanded to include cross-border entities such as trading platforms, clearing houses, and asset managers, mirroring the structure of the US Securities and Exchange Commission (SEC). The aim is to reduce regulatory fragmentation across the EU and make it easier for startups and smaller financial institutions to grow within Europe rather than seeking funding abroad.
The proposal forms part of the EU’s “capital markets union,” a long-standing initiative to strengthen Europe’s competitiveness in global finance. European Central Bank (ECB) President Christine Lagarde has publicly endorsed the concept, stating that creating “a European SEC” with direct supervisory powers could help manage risks associated with major financial institutions operating across borders.
A draft proposal is expected to be released in December 2025, according to people familiar with the discussions. If implemented, ESMA would be able to make binding decisions in disputes involving asset managers and act as the lead supervisor for key market infrastructure.
Related: Nordea Steps Into Crypto: Bitcoin ETP Brings Regulated Access for Nordic Investors
Resistance from Smaller States
However, the idea has met resistance from some smaller EU countries, including Luxembourg and Ireland, which argue that a centralised model could harm their domestic financial industries. Luxembourg’s finance minister Gilles Roth warned against an “ineffective centralised model,” preferring instead gradual alignment between national regulators.
France, Austria, and Italy have already expressed support for transferring crypto oversight to ESMA to prevent regulatory arbitrage under the Markets in Crypto-Assets (MiCA) framework. France in particular has voiced concerns over crypto firms exploiting more lenient national rules through licence “passporting”.
The European Commission confirmed it is “still exploring” EU-level supervision for critical financial infrastructure and large cross-border entities, including central counterparties and securities depositories. Legislative deliberations are likely to continue through 2026 once the proposal is formally presented.
Related: Standard Chartered Opens Luxembourg Hub for EU Digital Asset Services
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