EU Eyes US SEC-Style Regulator To Oversee Stocks and Crypto, But Not Everyone's On Board

The EU plans an SEC-style regulator to unify crypto and finance under ESMA. | Credit: Getty Images.

Key Takeaways

The EU is weighing the creation of an SEC-style central authority to oversee both crypto and traditional financial markets. The plan would expand ESMA’s powers, placing it at the heart of the bloc’s regulatory system. Exchange unions have pushed back, warning that a single supervisor could disrupt years of national collaboration.

For years, Europe’s financial markets have struggled under a maze of national regulators and red tape.

Now, Brussels wants to change that — and it’s taking a page straight out of Washington’s playbook.

The European Union is weighing plans to create a single, SEC-like supervisor to oversee both crypto and traditional finance, giving unprecedented power to the European Securities and Markets Authority (ESMA).

The goal: to make Europe more competitive, more unified, and less dependent on U.S. capital markets.

But not everyone is cheering.

From national regulators to crypto exchanges, critics say the move risks overcentralizing power and eroding the relationships that made Europe’s markets work in the first place.

An EU SEC?

The proposal, set to be unveiled as part of the Capital Markets Union (CMU) package in December 2025, aims to reduce regulatory fragmentation and strengthen Europe’s position as a unified market.

Under the proposal, ESMA would act as the EU’s chief financial regulator, responsible for directly supervising large, cross-border entities — including crypto exchanges, clearinghouses, and post-trade institutions.

National authorities would continue to oversee smaller, domestic firms.

Luxembourg’s finance minister Gilles Roth noted that while greater oversight is essential, Europe should aim for “supervisory convergence rather than creating a costly and ineffective centralized model.”

In practice, ESMA would have the final say in disputes between national regulators and could issue binding decisions on oversight matters involving major asset managers or exchanges.

Streamlining a Fragmented System

Currently, Europe’s financial ecosystem is weighed down by bureaucracy: hundreds of trading venues and post-trade institutions are scattered across dozens of jurisdictions.

Each operates under a slightly different rulebook, making cross-border operations cumbersome and expensive — particularly for smaller startups in the crypto and fintech space.

Supporters argue that a stronger ESMA could eliminate duplication, speed up decision-making, and make the EU a more attractive place for investors.

It would also give Brussels a powerful new tool to compete with the U.S., which continues to dominate global capital flows.

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However, not everyone is on board.

One European exchange group criticized the plan, saying it offers little benefit in transferring oversight of crypto asset service providers to ESMA.

The group warned that introducing a new supervisory layer could increase compliance costs and undermine years of cooperation with national regulators, who have a better understanding of local markets.

Echoes of Washington

The push for a “European SEC” comes as the U.S. itself debates how centralized its own regulatory framework should be.

Under the Biden administration, the SEC was often accused of overreach — particularly in crypto enforcement — while the Trump-era approach gave more power to the Commodity Futures Trading Commission (CFTC), creating a lighter-touch environment for digital assets.

In Europe, the tension is similar. Policymakers want stronger investor protections without smothering innovation.

The Markets in Crypto-Assets (MiCA) framework, which came into force in early 2025, was a major first step.

However, integrating crypto under a single pan-European regulator would represent a far deeper structural change — one that could reshape how both traditional and digital finance operate across the bloc.

The Road Ahead for ESMA

The European Commission’s market integration package is expected to be tabled in December 2025, after which it will face scrutiny from member states and financial unions.

If approved, ESMA’s expanded authority could come into effect by late 2026, ushering in a new regulatory era for Europe’s financial markets — one that could either cement the EU’s role as a global financial powerhouse or spark fresh bureaucratic turf wars.

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