Executive Director of ESMA, EU Regulatory Authority: Crypto Market Turmoil May Lead to Widespread Financial Stability Issues

Natasha Cazenave, Executive Director of the European Securities and Markets Authority (ESMA), the EU's securities market regulator, stated during a hearing in the European Parliament that although cryptocurrency still accounts for less than 1% of the global financial system and has limited spillover effects on traditional finance, the size of the cryptocurrency market is expected to double to 3.3 trillion euros by 2024, and the connection between institutions and traditional finance is rapidly deepening. Cazenave pointed out that if there is a severe price drop in the future, it may have an impact on the financial system, especially with the introduction of institutional funds such as ETFs and stablecoins, the transmission of risks will intensify. She emphasized that although the MiCA bill is an important milestone, "there is no absolutely secure encrypted asset" and that global collaboration and continuous regulatory improvement are still needed to prevent potential systemic shocks in the future.