National regulators within the European Union are clashing over proposals to centralize oversight of cross-border financial firms under the European Securities and Markets Authority (ESMA), according to a report by Risk.net.
The debate centers on whether integrating financial markets necessitates centralized supervision, or if national regulators should retain their authority. “Integration and centralised supervision are two different things,” Risk.net quoted an unnamed source as saying.
The disagreement comes as EU legislators consider plans to grant ESMA greater supervisory powers over crypto assets and capital markets, a move signaled in a recent EU plan to boost ESMA’s authority [3]. This potential expansion of ESMA’s role extends beyond traditional finance to include emerging areas like tokenized stocks, prompting warnings from the regulator about potential “investor misunderstanding” [4].
ESMA has already issued guidelines under the Markets in Crypto-Assets (MiCA) regulation, reshaping crypto regulation within the EU [5]. However, the question of whether to extend similar centralized oversight to broader financial markets remains contentious. A recent warning from ESMA also highlighted risks associated with crypto perpetuals, but the regulator’s concerns also apply to tokenized stocks [1].
The push for centralized supervision is intended to foster greater integration of the EU’s financial markets. However, some national regulators, including those in Belgium and Spain, are resisting the transfer of supervisory responsibilities to ESMA, according to Risk.net. The May-June 2025 regulatory round-up from Akin [2] suggests ongoing discussions regarding the balance between national and centralized oversight.