European Securities and Markets Authority

In a report released on Tuesday, the European Securities and Markets Authority (ESMA) warned investors that Crypto assets are extremely dangerous and may cause financial instability in the future.

Recent Released: SEC Chair Misrepresenting Crypto Laws?

The European Securities and Markets Authority (ESMA) has argued that additional control and monitoring is necessary due to the growing interconnectedness of crypto and traditional markets. This paper reveals the concerns of EU authorities regarding the cryptocurrency industry in light of the forthcoming MiCA regulatory framework.

Potential Dangers in the Cryptocurrency Market, According to the European Securities and Markets Authority

ESMA, the European Securities and Markets Authority, published a study titled “Crypto-assets and their hazards.”

In the interest of monetary stability” Crypto on October 4th. The study claims that crypto assets expose investors and businesses to substantial losses. Global regulators are worried about the developing ties between the crypto market and the traditional economy.

Although Crypto and traditional markets are currently very loosely connected, the organisation recognises that cryptocurrencies may one day present concerns of financial instability in these sectors.

The acceptance of Bitcoin for payments by consumer-focused companies like Tesla raises uncertainty in the established financial system.

If a major merchant started accepting Crypto or a major IT company started accepting peer-to-peer payments based on crypto-assets, the amount of people exposed to both systems would increase rapidly.

Direct exposure to cryptocurrencies is mentioned in the paper in the form of retail and institutional investors in crypto-assets, while indirect exposure is provided by derivatives, funds, and exchange-traded products (ETPs). It also claims that stablecoins, DeFi, and cryptocurrency exchanges are all ways in which risks might be transmitted to more conventional financial institutions markets.

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In addition, it references a survey conducted by the European Supervisory Authorities that found roughly 90 investment funds based in Europe to have direct exposure to actual crypto-assets. To better prepare government employees for the implementation of MiCA in 2024, research like these are being conducted.

With Their New Digital Proposed 2023 Euro Legislation

As the European Union works on the MiCA framework for regulating crypto assets, it also plans to launch the Digital Euro. Prior to this article’s publication, EU Commissioner Mairead McGuinness indicated that she would be proposing legislation allowing the ECB to issue a digital euro in the first quarter of 2023. Bank disintermediation and financial stability risks will be mitigated as a result.

Source: Google Trend

By Vil Joe

A writer and editor based out of San Francisco, Vil has worked for The Wirecutter, PCWorld, MaximumPC and TechHive. Her work has also appeared on InfoWorld, MacWorld, Details, Apartment Therapy and Broke-Ass Stuart. In her spare time, she takes too many pictures of her cats, watches too much CSI and obsesses over her bullet journal.

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