The European Central Bank (ECB) endorsed the European Commission’s initiatives to deepen capital markets integration and centralize supervision within the EU, including expanding the powers of the European Securities and Markets Authority (ESMA) and tightening regulation of the crypto sector.
The ECB supported a package of legislative proposals aimed at developing a single capital market, highlighting their importance for strengthening the resilience of the financial system, improving cross-border financing, and enhancing the effectiveness of monetary policy.
According to the document, requests for an opinion were submitted by the European Parliament and the Council of the EU between December 2025 and March 2026. The package includes three key initiatives:
- A regulation amending a number of existing EU acts, including rules on securities markets, clearing, trading, and crypto-assets, with the aim of deepening capital market integration and strengthening supervision at the EU level.
- A directive adjusting rules for investment funds and management companies to harmonize regulation and remove barriers to cross-border activity.
- A regulation introducing uniform rules on settlement finality in payment and settlement systems, including cross-border and distributed ledger technology (DLT) infrastructures.
The reform places a strong emphasis on strengthening the role of ESMA. The ECB supported granting the regulator direct supervisory powers over large cross-border market participants, including clearing houses and central securities depositories. It also proposed expanding the regulator’s resources and authority, including the power to conduct investigations and impose sanctions.
Special attention is given to the crypto market. The ECB supported the idea of transferring licensing and supervisory powers over crypto-asset service providers (CASP) to ESMA, which is expected to reduce regulatory fragmentation and risks to financial stability. The regulator also proposed tightening requirements for capital, reporting, and corporate structure for such companies, especially large players with cross-border operations.
The document also includes the development of financial market infrastructure using DLT. The ECB supported expanding the pilot regime for such solutions, as well as integrating tokenized instruments into settlement systems, provided that strict risk management requirements are met.
In the context of settlements, the regulator emphasized the need to preserve central bank money as the primary settlement asset and proposed limiting the use of stablecoins, citing increased credit and liquidity risks associated with their use.
In addition, the ECB called for further harmonization of stock market rules, including simplifying cross-border activities for investment funds and expanding ESMA’s role as a supervisory coordination center.
The ECB actively supports the use of DLT-based settlements, having approved a two-phase strategy for their implementation. The regulator also presented a long-term strategy for the development of tokenized wholesale financial markets in Europe and is developing a digital euro for everyday payments and transfers.
