European regulatory authorities warn that cryptocurrencies may pose a threat to financial stability

According to a report by Golden Finance, Natasha Cazenave, Executive Director of the European Securities and Markets Authority (ESMA), told the Economic and Monetary Affairs Committee on April 8th that as the cryptocurrency industry grows and its connections with traditional financial institutions deepen, the sharp decline in cryptocurrency prices in the future may have a chain reaction on the overall financial system. Although encrypted assets currently account for only 1% of global financial assets and have not yet formed a significant 'spillover effect', their development speed is rapid, especially in the crypto friendly US market. The European Union has implemented the Crypto Asset Market Regulation Act (MiCA) to address risks, but Cazenave emphasized that "there is no absolutely secure cryptocurrency" and that more rules may be needed to mitigate future risks. Currently, about 10% -20% of European investors hold cryptocurrency assets, while 95% of European banks have not yet ventured into this field.