The European Securities and Markets Authority is issuing a new warning regarding the potential risks that cryptocurrencies could pose to financial markets.
As the EU’s securities regulator, ESMA has revisited the topic of cryptocurrency regulation, cautioning that the associated risks could affect financial stability.
ESMA’s executive director, Natasha Cazenave, stated that the chance of these risks materializing has grown as the cryptocurrency sector experiences significant expansion and becomes further intertwined with traditional financial systems.
Cazenave addressed this concern during her opening remarks at a hearing held by the European Parliament’s Economic and Monetary Affairs Committee on April 8, 2025, focusing on crypto-assets and financial stability.
However, while ESMA anticipates that developments in the crypto markets may present risks to financial stability moving forward, their current influence is limited.
Cazenave pointed out that cryptocurrencies represent a relatively modest segment, comprising only around 1% of total global financial assets. There is also “limited integration” with traditional finance and the real economy, indicating that crypto has not yet become a significant component of the global financial services sector, particularly in payments. She noted that more than 95% of banks in the EU are not engaged in cryptocurrency activities.
“Crypto-asset markets are still comparatively small. However, in the current market environment, disruptions within even minor markets can initiate or trigger broader stability concerns within our financial system,” she concluded.
This recent warning from ESMA follows a few months after the agency called for stablecoins that failed to comply with the Markets in Crypto Assets regulations to be delisted. The MiCA regulations fully came into effect in December 2024, and ESMA’s statement promptly followed in January 2025.
As the EU’s markets regulator reassesses the risks associated with crypto assets, there is a noticeable shift in perspective among regulators in the United States. The U.S. Securities and Exchange Commission has taken several affirmative actions to foster innovation in the crypto space, reflecting a similar approach to that of the Trump administration.
Additionally, the Justice Department has announced the dissolution of its National Cryptocurrency Enforcement Team.