The European Systemic Risk Board (ESRB) has issued a warning regarding systemic risks arising from stablecoins, crypto investment products, and the consolidation of multi-functional financial groups. The board highlighted the potential shock effects that large, integrated crypto firms could have on the broader financial system. The ESRB stressed that the growing use of digital assets could pressure financial stability, calling for full implementation of the MiCA (Markets in Crypto-Assets) regulation and enhanced supervisory oversight. Experts note that effective enforcement could increase investor confidence and reduce market uncertainty. The board also emphasized that due to the quasi-banking functions of stablecoins and cross-risk exposure of multi-functional groups, monitoring potential contagion effects on the European financial system is essential. These warnings underline the need for crypto market growth to be accompanied by robust regulation and supervision.
ESRB Warns of Systemic Risks from Stablecoins and Multi-Functional Crypto Groups
