EU Plans SEC-Style Oversight for Stock and Crypto Exchanges to Boost Startups
A significant reform being prepared by the EU may grant the European Securities and Markets Authority (ESMA) authority comparable...
Quick overview
- The EU is preparing a reform to grant ESMA authority similar to the SEC, aiming to create a more cohesive financial system across its member states.
- The proposal will allow ESMA to directly oversee cryptocurrency platforms and stock exchanges, simplifying regulations and enhancing investor trust.
- Christine Lagarde supports the reform, suggesting it could improve the safety and competitiveness of EU markets on a global scale.
- France advocates for tighter oversight, arguing that centralized regulation by ESMA is necessary to close loopholes in the current system.
A significant reform being prepared by the EU may grant the European Securities and Markets Authority (ESMA) authority comparable to that of the SEC of the United States. The objective is to build a more robust and cohesive financial system that lowers obstacles across the 27 member nations of Europe and helps startups.
The Financial Times reported that the European Commission is working on a proposal that would increase ESMA’s power to directly oversee cryptocurrency platforms, stock exchanges and other trading infrastructure throughout the EU.
Why It’s Time for Change
Financial and cryptocurrency regulations are now managed by many national regulators. This disjointed system makes cross-border commerce more expensive and hinders the expansion of businesses. Simplifying regulations, cutting expenses and boosting investor trust throughout Europe are all possible with a single supervisor such as ESMA.
Christine Lagarde the president of the European Central Bank is in favor of the proposal claiming it might increase the safety and competitiveness of the EU’s markets internationally.
At the 2023 European Banking Congress Lagarde stated that expanding ESMA’s authority to create a European SEC might be the solution. “To reduce systemic risks posed by large cross-border firms it would need a broad mandate, possibly direct supervision.”
🇪🇺 NEW: The European Commission is drafting a proposal to give ESMA SEC-like oversight over crypto and stock exchanges, with draft expected in December.
Could this make the EU more crypto-friendly or stifle innovation? pic.twitter.com/JiYNBz3pXv
— Cointelegraph (@Cointelegraph) November 2, 2025
What’s in the Proposal
In December 2025, the European Commission wants to make the draft proposal public. If authorized, ESMA will have the authority to directly regulate both conventional financial institutions and providers of services for crypto-assets.
The plan also calls for granting ESMA the power to make legally enforceable rulings and settle disagreements between asset managers. Delays and disputes among national regulators would decrease as a result.
France Leading the Campaign for Tighter Oversight
One of the greatest supporters of centralized oversight has been France. Its securities authority proposed in September 2025 that “license passporting” for cryptocurrency companies be prohibited under the Markets in Crypto-Assets Regulation (MiCA).
Crypto companies with a license from one EU nation can operate in all 27 thanks to license passporting. According to France, Austria and Italy this leads to loopholes in enforcement and permits businesses to exploit lax regulations. To maintain equity within the bloc these nations want ESMA to oversee big cryptocurrency companies directly.
Constructing a Real Capital Markets Union
The MiCA law which went into force in December 2024 already permits crypto-asset service providers to conduct business within the EU. However disparities in enforcement across national borders have led to inconsistent results.
The Commission’s new proposal according to ESMA Chair Verena Ross attempts to address this “continued fragmentation” and move Europe closer to a single capital market.
One of the most significant steps toward improving Europe’s financial system’s integration, transparency and competitiveness with the U.S. would be the implementation of this reform which may potentially enhance both traditional and cryptocurrency markets.
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