Europe is preparing one of its boldest financial shake-ups in decades — a plan that could see a single authority take charge of both traditional and digital markets across the continent.
For years, the European Union has sought to build deeper, more liquid capital markets that can compete with the United States. Now, policymakers are exploring whether that vision requires consolidating the region’s patchwork of national regulators into a single body with sweeping powers.
According to officials familiar with ongoing discussions, the European Securities and Markets Authority (ESMA) could soon become that body — evolving from a coordinating agency into a fully empowered regulator responsible for supervising stock exchanges, crypto trading platforms, and other financial intermediaries.
The proposal, expected to be unveiled in December, represents the latest chapter in the EU’s long pursuit of a Capital Markets Union — an initiative aimed at tearing down internal financial borders and channeling more investment toward European startups and infrastructure.
From Fragmentation to Cohesion
Under the current system, each EU member state operates its own financial watchdog. That structure has created barriers for firms trying to expand across borders, making it costlier to raise capital compared with the U.S., where the Securities and Exchange Commission (SEC) oversees a single, unified market.
Proponents argue that giving ESMA direct supervisory authority could finally change that dynamic. The move would allow the agency to issue binding decisions in regulatory disputes and provide consistent oversight for large cross-border companies.
European Central Bank President Christine Lagarde has long supported the idea. Speaking at the European Banking Congress in Frankfurt, she called for “a European SEC” capable of managing systemic risks in both traditional and digital finance. “Expanding ESMA’s powers is not just a bureaucratic step,” she said. “It’s a necessity for Europe’s financial sovereignty.”
Crypto in the Spotlight
The shift would also reshape how the bloc polices the cryptocurrency sector. Under MiCA, the EU’s new crypto rulebook, firms licensed in one country can operate across all 27 member states. But some regulators, including France’s Autorité des marchés financiers (AMF), have warned that such “passporting” privileges could encourage companies to seek out the most lenient jurisdictions.
Paris has been among the most vocal advocates for stronger central oversight. Both Austria and Italy have joined France in calling for ESMA to take direct control over large crypto platforms, ensuring consistent enforcement of MiCA’s consumer and transparency standards.
Reform Meets Resistance
The idea of transferring power from national regulators to a single EU-level authority is far from universally popular. Some member states are wary of losing control over local markets and supervision, fearing that a one-size-fits-all approach might overlook regional dynamics.
Still, momentum appears to be building. ESMA chair Verena Ross said in October that the Commission’s proposal is designed to reduce “market fragmentation” and promote fairer competition. “The more unified our capital markets become, the stronger Europe stands globally,” she said.
Competing With America
Analysts say the timing is no coincidence. As Washington continues to attract global capital with its deep and integrated markets, Europe is under pressure to present a comparable alternative.
If adopted, the plan would give ESMA powers similar to those of the U.S. SEC — marking a historic shift toward a truly continental market structure.
Whether it succeeds will depend on Europe’s ability to balance national interests with its ambition for financial unity. For now, the message from Brussels is clear: competing with America means thinking like one market, not twenty-seven.
