EU markets watchdog warns of crypto-related financial stability risks

Reuters

Tue, Apr 8, 2025, 9:24 AM 2 min read

PARIS (Reuters) - The European Union's securities watchdog warned connected Tuesday that problems successful the cryptocurrency manufacture could airs risks to broader fiscal stableness successful future, arsenic the assemblage grows and arsenic ties betwixt it and accepted fiscal markets increase.

The entreaty for caution from the European Securities and Markets Authority (ESMA) comes arsenic U.S. economical policies roil planetary markets and U.S. authorities look to region immoderate of the barriers betwixt crypto and accepted banking sectors.

"EU fiscal markets are, arsenic we speak, nether terrible strain coming from the broader governmental and geopolitical developments," ESMA enforcement manager Natasha Cazenave said successful a code to the European Parliament posted connected the watchdog's website.

Stock markets person tumbled since U.S. President Donald Trump unveiled a blizzard of tariffs past week, starring to a crisp driblet successful crypto prices too. However, plus prices had recovered immoderate of those losses crossed markets connected Tuesday.

"Crypto-assets markets are inactive comparatively small. However, successful the existent marketplace environment, turmoil adjacent successful tiny markets tin originate oregon catalyse broader stableness issues successful our fiscal system," Cazenave said.

ESMA, which has repeatedly warned astir the risks of crypto, said the assemblage needed continued adjacent monitoring, she added, portion cautioning that risks to fiscal stableness from crypto were not yet significant.

Funds focused connected crypto marque up little than 1% of the EU money universe, and ESMA noted that 95% of EU banks bash not prosecute successful crypto activities.

ESMA's informing comes arsenic Trump - whose household is gathering a crypto concern - has called for an easing of crypto regulations.

U.S. regulators person made it easier for banks to prosecute successful crypto-related activities. Reuters reported connected Tuesday that the U.S. Justice Department is disbanding its National Cryptocurrency Enforcement Team.

A tally connected a stablecoin - a benignant of cryptocurrency typically pegged to the dollar - could interaction the terms of the fiscal assets utilized to backmost it, ESMA said, with perchance wider marketplace consequences.

(Reporting by Elizabeth Howcroft; Editing by Tommy Reggiori Wilkes and Joe Bavier)