The European Central Bank is doing something large bureaucracies rarely do voluntarily: admitting its processes got too heavy and then actually trimming them. The ECB’s Supervisory Board has launched a sweeping reform of how it oversees banks across the euro area, moving from a compliance-heavy approach to one built around risk prioritization and efficiency.
The initiative, branded “Next-level supervision,” kicked off in 2025 and targets full rollout during the 2026 supervisory cycle. For crypto markets, the interesting part is buried in the details: the ECB is explicitly earmarking freed-up resources for monitoring emerging risks tied to digital assets, stablecoins, and non-bank financial activities.
What’s actually changing
At the core of the reform is a complete overhaul of the Supervisory Review and Evaluation Process, known as SREP. The SREP reforms were decided in 2024, based on recommendations from an independent expert group that delivered its findings in 2023. Specific areas being streamlined include authorizations, capital decisions, and stress testing. The goal, according to the ECB’s December 2025 report titled “Streamlining supervision, safeguarding resilience,” is to reduce procedural burdens on both supervisors and banks without lowering the bar on resilience standards.
