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Crypto Growth Sparks Regulatory Concerns
The European Securities and Markets Authority (ESMA) is raising eyebrows in the crypto world again. Natasha Cazenave, ESMA’s executive director, recently warned that the growing connection between crypto and traditional finance could cause broader stability issues in the future.
Right now, crypto represents only about 1% of global financial assets. That sounds tiny, but Cazenave isn’t convinced size means safety. She cautioned that as crypto intertwines more with banks, investment firms, and big money players, a sudden crypto crash could shake up the whole financial system.
The Ripple Effect of Crypto Turmoil
In a recent statement to the Economic and Monetary Affairs Committee, Cazenave said, “Turmoil, even in small markets, can originate or catalyze broader stability issues in our financial system.”
Translation? Even if crypto feels like a separate universe, its problems could soon spill over into the real world — like that one neighbor with loud weekend parties suddenly joining your book club.
She pointed to events like the FTX collapse and recent exchange hacks as proof that crypto volatility isn’t just bad for crypto bros — it could be bad for everyone.
MiCA Regulation Isn’t the Final Boss
The EU has already been busy trying to put some guardrails around the crypto world. The Markets in Crypto-Assets (MiCA) regulation came into play last year to keep things in check.
But Cazenave made it clear: MiCA is only part of the solution. “There’s no such thing as a safe crypto-asset,” she added. Strong words, but in a world where $1.4 billion can vanish overnight in an exploit, probably fair.
She hinted that more rules could be on the way to limit crypto’s potential damage if things go sideways.
