The European Securities and Markets Authority (ESMA) has raised alarms about the risk of the crypto industry affecting traditional financial markets as it expands. Executive director Natasha Cazenave indicated that steep drops in crypto prices pose potential risks to overall financial stability.
Despite crypto currently accounting for only 1% of global financial assets, Cazenave highlighted the necessity of diligent monitoring due to growing ties between crypto and traditional sectors. She noted how rapid market changes could trigger significant stability issues.
While only about 5% of European banks engage in crypto, retail investor interest is rising. With estimates showing that 10% to 20% of Europeans have crypto exposure, the EU acknowledges the need for comprehensive regulations like MiCA to mitigate emerging risks.
Leave a Reply