The European Commission is exploring plans to bring stock and cryptocurrency exchanges under central supervision as part of a broader effort to make the bloc’s capital markets more competitive with those in the US.
The incoming proposal would expand the European Securities and Markets Authority’s (ESMA) jurisdiction to include stock and crypto exchanges, as well as crypto asset service providers and other trading infrastructure, the Financial Times reported on Saturday.
The EU's current landscape comprises numerous national and regional regulatory agencies, which significantly raises the cost of cross-border trade, hindering startup development in the region.
Empowering a single supervisory body akin to the US Securities and Exchange Commission (SEC) may be the next step for the EU's “capital markets union,” which is also backed by European Central Bank (ECB) President Christine Lagarde.
“Creating a European SEC, for example, by extending the powers of ESMA, could be the answer. It would need a broad mandate, including direct supervision, to mitigate systemic risks posed by large cross-border firms,” Lagarde said at the European Banking Congress in November 2023.
The commission is set to publish a draft in December, according to people familiar with the matter who spoke with the FT.
The proposal would also enable ESMA to have the final say in disputes between asset managers, issuing binding decisions without direct supervision.
France Considers Blocking License Passporting, Raising MiCA Concerns
The EU’s single supervision model may address the concerns related to crypto service providers seeking licenses under more lenient regulatory jurisdictions.
In September, France's securities regulator threatened to ban crypto license “passporting” under the Markets in Crypto-Assets Regulation (MiCA) regime, raising concerns about enforcement gaps in the EU-wide regulatory framework.
France also became the third country to call for the Paris-based ESMA to take over supervision of major crypto companies, after Austria and Italy.
Under MiCA, which took effect for crypto-asset service providers in December 2024, companies authorized in one member state can use that license as a “passport” to operate across the 27-nation bloc.
Verena Ross, ESMA chair, also confirmed the commission’s plans to transfer financial sector oversight from national regulators to ESMA in October.
Ross said the proposal aims to address “continued fragmentation in markets” and move closer to a unified capital market across Europe.