EU Proposes Centralizing Financial Market Oversight Under ESMA

The European Commission proposed transferring regulatory powers to the European Securities and Markets Authority, affecting market infrastructures and cryptocurrency service providers, with announcements made on December 4th in Brussels.

This shift aims to centralize EU market supervision, enhancing regulatory efficiency but facing opposition from member states concerned about national regulatory autonomy.

ESMA’s Expanded Role in Financial Regulation

The European Commission’s recent proposal plans to strengthen ESMA’s authority by transferring regulatory powers from national entities. These changes expand ESMA’s oversight of clearing houses, central securities depositories, and cryptocurrency companies, in line with the MiCA regulation. Upcoming negotiations require approval from the European Parliament and Member States, with Cyprus playing a pivotal role in 2026.

This proposal introduces initial funding by the EU, with ongoing costs covered by market participants such as exchanges and crypto service providers. The revision endeavors to streamline inter-European operations, extend ESMA’s jurisdiction, and curtail additional national requirements on financial market players.

While prominent figures have not commented, response within the sector includes scrutiny from member states concerned over centralized control. Verena Ross, ESMA Chair, highlighted ambitions to simplify EU market operations and regulatory enforcement. As Ross stated, “We aim to pursue a holistic strategy to streamline rules, enhance risk-based supervision and ensure proportionate reporting requirements.”

Implications for EU’s Cryptocurrency Landscape

Did you know? The EU’s MiCA framework initiated less than a year ago was a foundational move toward this centralization of cryptocurrency oversight under ESMA’s authority.

According to CoinMarketCap, Ethereum is priced at $3,197.48, with a trading volume of $30.95 billion. It commands a market dominance of 12.15%, although experiencing a negative change of -8.16% over the past 30 days. The circulating supply stands at approximately 120.70 million tokens.

Insights from Coincu suggest that the EU’s regulatory centralization may enhance market efficiencies and innovation, though it does face challenges. Historical trends indicate EU policies shaping global regulatory landscapes, especially concerning digital assets.