The American position of the United States could increase the level of risk on the financial markets by deepening the links between traditional finance (tradfi) and the economy of digital assets, according to the regulator, the European authority of securities and markets.
“This user-friendly Crypto position has the potential to accelerate the adoption of cryptography, including by institutional investors,” said a spokesperson for the European Union financial market regulator in an interview. “This would in turn increase interconnection and, defaulting relevant guarantees, risks of negative effects of the effects between cryptography and traditional markets.”
Since became president on January 20, Donald Trump has ordered his administration to set up a Bitcoin reserve and urged him to establish friendly policies. The cryptography market had already reacted positively to Trump’s electoral victory in November, and Bitcoin (BTC) climbed a record of around $ 109,000 the day it was sworn in, Coindesk’s data showed.
In a joint report published on Monday, ESMA, European Banking Authority and European Insurance and Occupational Pensions Authority identified “the volatile assessments of cryptocurrencies, motivated by the expectations of the agenda of the American deregulation policy; Increased interconnection to traditional financial markets”, as a key engine of financial markets.
In addition, Piero Cipollone, member of the board of directors of the European Central Bank, asked a digital euro, a digital version supported by the ECB of the single currency, to substitute for cryptographic assets, which he described as “very volatile and speculative in nature”.
“In addition, the United States’s push to maintain the global domination of the dollar by promoting stablecoins worldwide presents its own set of challenges,” he said.
