EU Expands ESMA Authority, Unifying Crypto and Financial Market Supervision

The European Union is set to significantly enhance the powers of the European Securities and Markets Authority (ESMA), bringing crypto exchanges under the same regulatory umbrella as traditional financial market infrastructures. This move aims to reduce fragmentation and boost the competitiveness of European capital markets.

The proposed reforms, expected in December as part of the Markets Integration Package, will grant ESMA direct oversight of cross-border institutions—including major trading venues, clearinghouses, and crypto asset service providers. The harmonization effort aligns with the broader vision of the Capital Markets Union (CMU), addressing current inefficiencies that drive European firms to seek funding abroad.

By centralizing supervision while preserving local market knowledge, the EU seeks to balance regulatory consistency with member state concerns. The framework mirrors aspects of the U.S. Securities and Exchange Commission's approach, potentially setting a global precedent for integrated financial market oversight.