Europe is establishing a Regulatory Authority for Cryptocurrencies.

The European Commission plans to establish a new regulatory body for cryptocurrency exchanges and securities markets. This new institution will monitor Europe’s financial infrastructure with a structure similar to the United States Securities and Exchange Commission (SEC).

The regulation proposal, to be presented in December, aims to reduce market fragmentation across Europe and increase competitiveness. Under the new regulation, the powers of the European Securities and Markets Authority (ESMA) are set to be expanded to create a single overarching regulatory body. This way, financial institutions engaging in cross-border operations, such as cryptocurrency exchanges and securities platforms, will be able to operate across Europe without dealing with the licensing processes of dozens of different national authorities.

European Central Bank (ECB) President Christine Lagarde and her predecessor Mario Draghi are among the strong supporters of this plan, with Lagarde recently expressing support for the idea of a single European exchange proposed by Germany. However, smaller financial centers like Luxembourg and Dublin are approaching the plan cautiously due to concerns that the interests of larger countries may dominate.

This step is considered part of Europe’s Capital Markets Union objective. Additionally, new proposals are expected to be presented in December regarding the tokenization of real assets and the digital euro (CBDC). It is anticipated that the new regulations will pass through the European Parliament and Council by 2026.