Top European securities regulators have warned that a surge in inflation could drive investors into cryptocurrencies. Regulators have emphasized the “imbalance” in how EU countries deal with cryptography and are calling for a common regulatory framework across European countries.
Inflation could drive investors to cryptocurrencies, EU regulators say
Bloomberg reported Thursday that the European Securities and Markets Authority (ESMA), the EU’s premier securities market regulator, warned that rising inflation could drive private investors into cryptocurrencies.
Regulators are also seeking a formal legal framework to govern the crypto industry in all EU countries.
ESMA Chair Verena Ross said in an interview last week:
As inflation rises, investors will look for investments that can compensate for inflation and yield greater returns. This can lead to greater risk taking.
“That’s what we monitor very carefully,” she emphasized.
Many investors, including renowned hedge fund manager Paul Tudor Jones, believe that Bitcoin is an excellent hedge against inflation. However, crypto assets are very volatile. It has decreased by 26% in the last 30 days. This month, the entire crypto market was saved by about $ 500 billion.
Currently, EU countries have set their own rules regarding cryptography and are making decisions based on local law. There is no common framework for the crypto sector.
Details of ESMA chair:
Currently, there is no EU regulatory framework for these types of entities, and there is currently an imbalance in how national supervisors treat and determine these entities.
“That’s where the general regulatory framework comes in,” she emphasized.
Last month, the European Parliament Accept The power of ESMA to regulate crypto issuers and service providers.
The European Parliament and the European Council are currently reviewing the market for the Crypto Assets (MiCA) bill. The law, introduced in 2020, provides a legal framework for the crypto asset market to develop within the EU.
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