EU Regulator Warns Soaring Inflation Could Push Investors Into Crypto – Calls For Unified Regulatory Framework

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Europe’s top securities regulator has warned that soaring inflation could push investors into cryptocurrencies. Stressing that there is an “imbalance” in the way each EU country deals with crypto, the regulator calls for a common regulatory framework for all European countries.

Inflation could push investors into crypto, says EU regulator

The European Securities and Markets Authority (ESMA), the EU’s top securities markets regulator, has warned that soaring inflation could push retail investors into cryptocurrencies, Bloomberg reported on Thursday.

The regulator also called for a formal legal framework to govern the crypto industry in all EU countries.

ESMA Chair Verena Ross said in an interview last week:

With rising inflation, investors will seek to find investments that can offset inflation and provide higher returns, which could lead to greater risk taking.

“It’s something we’re watching very closely,” she said.

Many investors believe that bitcoin is an excellent hedge against inflation, including renowned hedge fund manager Paul Tudor Jones. However, the crypto asset is highly volatile; it has fallen 26% in the past 30 days. This month, the crypto market as a whole lost around $500 billion.

Currently, each country in the EU makes its own rules when it comes to crypto, making decisions based on local laws. There is no common framework for the crypto industry.

The ESMA Chair detailed:

There is currently no European regulatory framework for this type of entity and therefore there is currently an imbalance in the way national supervisors treat these entities and how they judge them.

“This is where a common regulatory framework will help,” she stressed.

Last month, the European Parliament granted ESMA the power to regulate crypto issuers and service providers.

The European Parliament and the European Council are currently considering the Crypto Asset Markets Bill (MiCA). The legislation, introduced in 2020, provides a legal framework for the development of crypto asset markets within the EU.

What do you think of the words of the President of ESMA? Let us know in the comments section below.

Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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