The European Union’s financial stability watchdog said new regulations may be needed to cover large cryptocurrency conglomerates and smart contracts, as it warned that the growing digital asset and DeFi sectors could pose systemic risks to the economy.
With the new Markets in Crypto Assets Regulation (MiCA) set to take effect within the bloc in 2024, the European Systemic Risk Board (ESRB), chaired by EU Central Bank President Christine Lagarde, warned in a report on Thursday that crypto lending The risk of investment and investment and the high leverage ratio of the digital asset market still exist.
While MiCA sets out governance, licensing and reserve requirements for participants such as wallet providers and stablecoin issuers, it leaves out areas such as crypto lending and staking, which could “pose significant risks to consumers.”