The crypto-friendly position of the United States could increase the level of risk in financial markets by deepening connections between traditional finances (tradfi) and the economy of digital assets, according to the regulator of the European Authority of Securities and Markets.
“This friendly position with cryptocurrencies has the potential to accelerate cryptographic adoption, even for institutional investors,” said a spokesman for the European Union financial market regulator in an interview. “This in turn would increase the interconnection and, by failing the relevant safeguards, the risks of the negative effects of the indirect between cryptography and traditional markets.”
Since he became president on January 20, Donald Trump ordered his administration to establish a Bitcoin reserve and urged it to establish friendly policies with cryptography. The cryptographic market had already reacted positively to Trump’s electoral victory in November, and Bitcoin (BTC) rose to a record of around $ 109,000 the day he swore, they showed Coindesk’s data.
In a joint report published on Monday, ESMA, the European Banking Authority and the European Authority of Occupational Insurance and Pensions identified “volatile crypto-active assessments, driven by the expectations of the American deregulatory policy agenda; growing interconnections to traditional financial markets”, as a key promoter in financial markets.
Separately, Piero Cipollone, a member of the Executive Board of the European Central Bank urged a digital euro, a digital version backed by the Single Currency ECB, to replace cryptographic assets, which described as “highly volative and speculative nature.”
“In addition, the impulse of the United States to maintain the global domain of the dollar through the promotion of Stablcoins worldwide presents its own set of challenges,” he said.
