The European Securities and Markets Authority is sounding a fresh caution at the potential risks crypto could pose to financial markets.
ESMA, the European Union’s securities watchdog, has once again brought up the topic of cryptocurrency regulation, expressing concern that risks associated with cryptocurrencies could have an effect on the stability of the financial system.
As the cryptocurrency business continues to record enormous growth in tandem with more integration with traditional banking, Natasha Cazenave, executive director of the European Securities and Markets Authority (ESMA), has stated that this likelihood has grown.
In his opening speech at the hearing on crypto-assets and financial stability that took place on April 8, 2025, on behalf of the Economic and Monetary Affairs Committee of the European Parliament, Cazenave made some remarks regarding the subject matter.
Although the European Securities and Markets Authority (ESMA) considers the events that occur in the cryptocurrency asset markets to be potential threats to the stability of the financial system in the future, the impact that these events are having right now is rather minor.
According to Cazenave, the cryptocurrency industry is still a relatively modest sector, accounting for only approximately one percent of the total economic assets in the world. Additionally, there is a “limited integration” between traditional banking and the real economy.
Cryptocurrency is not yet a significant component of the global market for financial services, which includes payments. Cazenave stated that more than 95% of the banks in the European Union do not participate in cryptocurrency.
After a few months, the European Securities and Markets Authority (ESMA) issued a second warning, which comes after the agency had requested the delisting of stablecoins that continued to violate the regulations governing the markets for crypto assets.
Following the full implementation of MiCA in December 2024, the European Securities and Markets Authority (ESMA) issued a statement in January 2025.There is a significant shift in stance from authorities in the United States, while the markets watchdog of the European Union is revisiting the subject of the risks associated with crypto assets.
Similar to the approach that President Donald Trump’s administration has chosen, the United States Securities and Exchange Commission (SEC) has taken several constructive efforts to encourage innovation in the cryptocurrency industry. The National Cryptocurrency Enforcement Team was part of the Justice Department’s announcement that it will be disbanding.
