The European Securities and Markets Authority (ESMA) has warned that the rapid growth of the crypto industry and its increasing ties to the traditional financial system could pose rising risks to global financial stability.
Speaking before the Economic and Monetary Affairs Committee on April 8, ESMA Executive Director Natasha Cazenave stressed that sharp future drops in crypto prices could have a ripple effect on traditional markets. Although crypto assets currently account for only about 1% of global financial assets — not yet large enough to cause major systemic impacts — connections between crypto and traditional finance are expanding rapidly, especially in the U.S.
“Even turmoil in small markets can be the source or catalyst for broader financial stability issues,” Cazenave warned. She also highlighted concerns around spot crypto ETFs, stablecoin use, hacks, scams, and scandals — including the recent $1.4 billion Bybit exploit and the collapse of FTX in 2022.

The European Union has taken initial steps to address these risks, notably through the Markets in Crypto-Assets (MiCA) regulation introduced last year. However, Cazenave emphasized that MiCA is only a first step and that “there is no such thing as a safe crypto asset,” underscoring the need for ongoing regulatory development.
She also pointed out that Europe still lags behind the U.S. in crypto adoption, with over 95% of European banks having no involvement in the crypto sector. On the other hand, individual investor interest is rising, with an estimated 10–20% of Europeans now owning or investing in crypto assets — a figure comparable to U.S. adoption rates, which range from 15% to 28%.
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