The European Union’s securities watchdog warned that challenges in the cryptocurrency industry could pose future risks to financial stability as the sector expands and its connections with traditional financial markets deepen.
This caution from the European Securities and Markets Authority (ESMA) comes amid global market disruptions caused by US economic policies and efforts by US authorities to reduce barriers between crypto and traditional banking sectors.
ESMA Executive Director Natasha Cazenave noted that EU financial markets are currently under significant strain due to broader political and geopolitical developments, as mentioned in her speech to the European Parliament on the watchdog’s website.
Since US President Donald Trump announced a series of tariffs last week, stock markets have tumbled, leading to a sharp decline in crypto prices. However, asset prices have since recovered some of those losses as of Tuesday.
