European Commission eyes SEC-style single supervisor over crypto, stock exchanges: FT
In a tectonic shift that could fundamentally reshape the continent's financial architecture, the European Commission is quietly assembling a legislative bombshell set for a December proposal, one that would centralize supervision of both crypto firms and traditional stock exchanges under a single, powerful regulatory agency—a move that echoes the formidable authority of the U. S.Securities and Exchange Commission. This isn't just another bureaucratic reshuffle; it's a direct response to the chaotic fragmentation of the current system, where 27 national regulators often pull in different directions, creating a compliance nightmare for cross-border crypto services and leaving gaping loopholes for bad actors.The vision, as reported by the Financial Times, is to create a unified rulebook and a single supervisory body, likely empowering the Paris-based European Securities and Markets Authority (ESMA) with direct oversight powers it has long craved. For the burgeoning crypto industry, this represents a double-edged sword: on one hand, it promises the holy grail of regulatory clarity, a harmonized 'passport' to operate across the entire EU single market without navigating a labyrinth of national regimes, potentially unlocking a wave of institutional capital.On the other, it raises the specter of heavy-handed, TradFi-style regulation that could stifle the very innovation that defines the DeFi space, imposing capital requirements, stringent licensing, and operational mandates more suited to a legacy bank than a decentralized autonomous organization. The parallels to the SEC are striking and deliberate; Brussels has watched with a mix of envy and alarm as the U.S. agency has aggressively expanded its reach into crypto through enforcement actions, and this proposal is Europe's bid to establish its own, more structured sovereignty over digital assets.The implications ripple far beyond crypto, however. By potentially placing traditional stock exchanges under the same roof, the Commission is signaling a future where the lines between digital and traditional finance are irrevocably blurred, where a single regulator oversees everything from a Bitcoin ETF on a German exchange to the settlement of a corporate bond in Milan.This fusion of oversight speaks to a broader philosophical battle: is crypto a unique, disruptive technology requiring a bespoke framework, or is it simply a new asset class that should be folded into the existing financial regulatory apparatus? Critics, particularly from the crypto-native community, warn that applying a 20th-century regulatory mindset to 21st-century technology could kneecap Europe's potential to become a global Web3 hub, especially as jurisdictions like Dubai and Singapore craft more agile, innovation-friendly regimes. Proponents, however, argue that legitimacy and consumer protection are the prerequisites for mass adoption, and that a strong, predictable regulator is the only way to cleanse the industry of its Wild West reputation and attract the trillions of dollars in institutional investment waiting on the sidelines.The coming months will see an intense lobbying war, with banking giants, crypto unicorns, and member states all jockeying to influence the final text. The stakes could not be higher; this single proposal will likely determine whether the European Union becomes a walled garden of tightly controlled digital finance or a dynamic, integrated market that successfully bridges the old world of finance with the new.
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