EU Watchdog Wants to Address Threat Crypto Assets Could Pose to Financial System

The European Systemic Risk Board is looking into measures and policies to address the potential threat that crypto assets could present to the global financial system.

AccessTimeIconJun 30, 2022 at 3:54 p.m. UTC
Updated May 11, 2023 at 6:17 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

The European Systemic Risk Board (ESRB) has deemed it a "matter of urgency” to consider the need for additional regulatory measures and policy steps to address the potential threat that crypto assets could pose to the financial system.

The body, which is responsible for ensuring the stability of the financial system in the EU, said in a statement on Thursday that while crypto assets currently have a limited hold on the financial system, ”these risks could materialize quickly and suddenly.”

Crypto’s recent boom and bust has caused regulators to pay closer attention to the market. The digital assets market had a market capitalization of around $790 billion at the start of 2021 and then peaked at almost $3 trillion in November before plunging to $1 trillion as of June 30, according to CoinGecko. Recently, regulators have become more concerned about the risks that crypto poses because of the recent collapse of terraUSD (UST) and troubles faced by crypto lenders such as Celsius.

The ESRB also hopes to identify crypto’s possible systemic implications on the EU financial system, as well as consider potential legal actions and regularly monitor the digital asset sector.

The EU is not the only one looking into how to mitigate risks posed by crypto assets. The U.K.’s Treasury published a consultation paper in May in which it said it planned to legislate that the Bank of England, its central bank, would have the power to supervise stablecoins that could impact the wider economy.

The ESRB said it planned to make proposals on how to ensure a European and global regulatory standard was developed to better safeguard against crypto assets that could one day pose systemic risks.

The EU is already in the process of producing a legislative package for crypto assets called Markets in Crypto Assets (MiCA) that would be transportable across all 27 member nations. The EU has reaffirmed its “support for a quick adoption and implementation” of MiCA.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Camomile Shumba

Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.