EU Push to Make ESMA a ‘European SEC’ Sparks Bottleneck Fears

- Proposal centralizes licensing and supervision for crypto and fintech firms across the EU. - Experts voice concerns over potential bottlenecks threatening startups and innovation. The European Commission has proposed transforming the European Securities and Markets Authority (ESMA) into a centralized regulatory body, similar to a “European SEC.” This new authority would oversee licensing and supervision for crypto and fintech firms across the European Union. If approved, this initiative could enhance the EU’s regulatory framework and improve its competitiveness with the United States. On December 6, 2025, Cointelegraph reported that the proposal signifies a landmark change in the EU’s approach to crypto regulation. The European Commission aims to grant ESMA expanded jurisdiction to streamline financial oversight across member states and foster a unified financial ecosystem. However, legal experts caution that centralizing regulatory authority could create bottlenecks in the licensing process. These delays might slow innovation and create additional hurdles for startups that rely on rapid approvals. Furthermore, experts question ESMA's ability to manage such an extensive transformation effectively. The agency's success will hinge on its operational readiness, resource allocation, and collaboration with regulatory bodies in each member state. The European Parliament and the Council must approve the proposal before it takes effect.