EU to expand ESMA’s powers over crypto and exchanges
The EU’s securities watchdog, ESMA, is in line for broader authority over the bloc’s financial plumbing – from crypto firms and service providers to traditional exchanges and clearing houses.
The European Union is seeking to close the gaps between its 27 national supervisors and establish a stronger center where business and risk already cross borders. The aim is a coherent rulebook that market participants can navigate.
ESMA chair Verena Ross has signaled that the European Commission is preparing reforms that would shift part of the oversight from national capitals to Brussels. Ross said the reforms aim to turn today’s fragmented oversight into a consistent EU-wide regime. That should help both investors and firms that want to scale across the EU without running 27 separate approval mazes.
After the Markets in Crypto‑Assets (MiCA) rulebook went live, it became clear that member states interpret licensing and monitoring very differently. Those gaps create room for regulatory arbitrage, which is good for fast movers, but bad for investor protection and the competitiveness of EU-based venues. Jurisdictions with lighter touch rules and offshore‑style incentives have pulled in more capital than those with tougher requirements, sharpening the debate over a level playing field.
ESMA’s initial new responsibilities will include direct supervision of providers of the EU‑wide consolidated tape, a single feed of prices and volumes from all major trading venues, and oversight of ESG rating agencies. The European Commission is also considering an EU-level supervisory framework for the largest cross-border financial and crypto service providers.
Not all member states support the plan. Smaller countries worry that a power shift could dent their local financial ecosystems and make their offshore and preferential national regimes less attractive. EU officials argue that the reforms are not aimed at full centralization but at targeted supervision designed to reduce duplication and strengthen market stability.
By late 2025, the European Commission aims to present proposals to further integrate trading and post‑trade infrastructure and to standardize supervision. If adopted, the measures would give ESMA stronger tools to address cross-border risks and provide clearer compliance standards for crypto and traditional market operators.
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