The European Securities and Markets Authority (ESMA) has reiterated concerns about potential financial risks posed by cryptocurrencies. The warning comes as the sector experiences rapid growth and increasing links with traditional finance.

ESMA executive director Natasha Cazenave addressed the European Parliament's Economic and Monetary Affairs Committee on 8 April. She highlighted the need for continued vigilance.

Cazenave warned that instability in even minor markets could spread through the wider financial system. She noted that most EU banks still avoid the crypto market, with over 95% having no involvement.

The latest warning follows ESMA's earlier call to delist stablecoins that failed to comply with the Markets in Crypto Assets (MiCA) regulation. In January 2025, the regulator signalled its intent to enforce the new rules strictly.

As the EU strengthens oversight, a contrasting stance is emerging in the United States. Regulators under President Trump have shifted towards supporting crypto innovation.

The US SEC has taken steps to ease regulatory pressure, while the Justice Department recently disbanded its National Cryptocurrency Enforcement Team.