The European Commission is working on an initiative to create a single supranational regulator for the EU financial markets, including stock and cryptocurrency markets. The presentation of the relevant legislative package, known as the “Market Integration Package,” is expected in December 2025.
This is reported by Finway
Single Supervisory Structure for EU Markets
The introduction of the new regulator aims to consolidate functions currently performed by dozens of national supervisory authorities and hundreds of trading and post-trading platforms. The European Commission believes that fragmentation leads to increased costs for cross-border transactions and hinders the development of innovative companies and startups.
The need for unifying oversight of financial markets has been emphasized by ECB President Christine Lagarde and Mario Draghi, the former Prime Minister of Italy. The latter, in his analytical report, called for the completion of the capital markets union, which is intended to ensure the competitiveness of the European financial system.
Discussions and Disagreements Among EU Member States
The proposed reform involves transferring oversight of stock and cryptocurrency exchanges, as well as clearing and depository infrastructures, to the European Securities and Markets Authority (ESMA). ESMA would potentially gain supervisory powers over stock exchanges, cryptocurrency services, central counterparties (CCPs), and central securities depositories (CSDs). The agency would also have the final say in resolving disputes between the largest asset management companies and national regulators.
“We are still exploring the potential for EU-level oversight of key infrastructures — such as clearing houses, securities depositories, and trading venues, as well as large cross-border companies, including asset managers,” the European Commission stated.
The introduction of centralized oversight is supported by France, Italy, and Germany. At the same time, Luxembourg and Ireland oppose it, fearing a weakening of national financial centers. Luxembourg’s Finance Minister Gilles Roth emphasized that the country supports the convergence of supervisory standards but not the creation of an “expensive and ineffective centralized model.”
European exchanges are also expressing concerns about potential increases in compliance costs with new requirements. Representatives of the fund industry believe that the expansion of ESMA’s powers will lead to higher fees for the sector.
Germany had previously opposed increased centralization; however, the current government under Chancellor Friedrich Merz shows openness to compromises. In particular, Berlin may agree to transfer part of the oversight of the asset management sector to ESMA but still does not support the direct oversight of cryptocurrency exchanges by the European regulator.
In April, ESMA Executive Director Natasha Cazenave warned that the strengthening of ties between the cryptocurrency market and traditional finance poses risks to the financial stability of the EU. The Bank of France has called for transferring oversight of large cryptocurrency companies to ESMA to ensure uniform regulatory standards within the European Union.