The European Securities and Markets Authority (ESMA) has warned that as the cryptocurrency sector expands and integrates into traditional finance, it could increasingly destabilize financial markets.
Although cryptocurrencies only account for 1% of global financial assets at present, ESMA's executive director Natasha Cazenave noted that they are not yet important enough to cause significant effects on traditional markets.
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However, she highlighted the rapidly growing links between cryptocurrencies and traditional markets, especially in the cryptocurrency-friendly US, and called for greater vigilance.
Cazenave added:
"Crypto-assets markets evolve quickly, in an often unpredictable manner, and we need to keep a close eye on these developments."