Crypto poses a limited risk to financial markets, ESMAComms said on Tuesday, but the EU agency warned that could change rapidly. jackschickler reports.
Growing crypto take-up by investors means future crypto crashes could affect conventional financial markets, the European Securities and Markets Authority has warned in a paper published on Tuesday, noting the risk of consumer rip-offs and operational failures.
The document cites an April survey by regulators showing that, in April, just 90 European investment funds had direct exposure to crypto, with a further 20 exposed indirectly via derivatives – a drop in the ocean of the bloc’s 60,000 funds. “Imagining a scenario in which a large retailer would enable crypto-assets as a payment option, or a leading tech company would introduce crypto-asset based peer-to-peer payments, consumer exposure could soar in a short period of time, strengthening the link” between the crypto and conventional financial realms, the document said.