The European Commission has announced plans for significant reforms to centralize supervision of financial services.
The Commission intends to regulate stock exchanges, clearinghouses, and cryptocurrency exchanges.
This aligns with its goal of completing the Capital Markets Union. At the same time, the IMF has raised concerns about the rapid growth of stablecoins.
The IMF has also emphasized the increased risk posed by fintech and big tech firms in global financial intermediation.
According to the Financial Times, the Commission’s reform also plans to expand the European Securities and Markets Authority’s (ESMA) powers.
ESMA will gain direct supervisory authority over stock exchanges and clearinghouses. This means that crypto asset service providers will now be subject to ESMA supervision as well.
The reform will target large financial institutions that operate across member states.
The proposal aims to reduce regulatory fragmentation across member states and enhance the competitiveness of the EU.
ESMA to Gain SEC-Like Powers
As part of the plan, the ESMA would be given direct supervision of significant cross-border organizations.
This would include stock exchanges, cryptocurrency asset service providers, and post-trade entities such as clearinghouses.
ESMA would also have the power to resolve disputes between national regulators and large asset managers through binding decisions.
Germany has expressed support for the proposal, whereas Luxembourg and Ireland are more cautious.
They are concerned about surrendering national control and the potential for a disproportionate impact on smaller financial sectors.
Industry organizations have also raised concerns about higher compliance costs and the possibility of ESMA overreaching its expectations.
The Commission continues to examine alternative supervision models, working towards finding the appropriate balance between EU-wide interests and local area expertise.
The reforms are part of broader efforts to enhance the competitiveness of the EU and harmonize its financial markets.
If enacted, these reforms could change the way financial services, including crypto, are regulated across the bloc.
IMF Warns of Stablecoin Surge and Fintech Risks
In a separate development, the IMF highlighted the explosive growth of stablecoins. USDT and USDC are the two largest stablecoins.
They grew rapidly in recent years. By 2022, their combined market value had passed $200 billion. The IMF warned that stablecoins offer faster payments and better financial access.
It said they also create risks for monetary control and financial stability, adding that stablecoins may weaken efforts to stop money laundering.
The organization called for forward-looking regulation to manage these risks and ensure transparency in asset backing.
The IMF also discussed how fintech and big tech firms are transforming financial services.
Global Push for Smarter Regulation
Both the EU and IMF developments reflect a growing global effort to regulate digital finance. The IMF supports initiatives like Project Agorá, which explores unified ledgers for cross-border payments.
It highlights the need for strong public infrastructure. It calls for private innovation to drive progress and advocates for coordinated policy to mitigate financial risks.
As digital assets and platforms continue to evolve, regulators struggle to keep pace. The EU’s proposed reforms and the IMF’s warnings underscore the urgency of building resilient, inclusive, and well-regulated financial systems.
Source: https://www.thecoinrepublic.com/2025/11/02/eu-to-centralize-financial-oversight-as-imf-warns-on-crypto-risks/
