The EU Commissioner for financial services, financial stability and capital markets union Mairead McGuinness spoke of the “global need” for regulators to create legislation for the crypto industry.
Speaking in a panel at the Financial Times and IDA Ireland European Financial Forum 2022, Mcguiness noted how there is a global need for principles around the whole crypto space.” Speaking on the subject of technology and finance, she affirmed that it was important not to stifle the nascent industry, however McGuiness iterated specific risks that need to be addressed, noting:
“When you hear that people are taking financial advice on TikTok or through other social media platforms, or that young people are engaging with their pals in investing in various cryptocurrencies almost as a pastime, it doesn’t sound alarming”
Speaking about how regulators need to consider thought processes of the younger generation, McGuiness said that the EU is trying to future gaze and look for “gaps in regulation”, adding that she is concerned that some people investing in cryptocurrency were not aware of the risks involved, and this is where regulators need to step in.
“But I don’t want to suggest that we are overly alarmed,” she continued. “What I do want to say is that anything that is growing and unregulated can cause enormous problems if we don’t get to grips with it.”
The EU commissioner placed great emphasis on how regulation needs to protect small investors, but her comments indicated that the EU is not overly alarmed by the advancements in technology when concerning cryptocurrencies, despite the Financial Stability Board, a global watchdog that monitors financial authorities in 24 countries, warning that the crypto asset market poses a threat to global financial stability.
The report estimated that the crypto market grew by 3.5 times in 2021, with the report noting:
“Although the extent and nature of use of crypto assets varies somewhat across jurisdictions, financial stability risks could rapidly escalate, underscoring the need for timely and pre-emptive evaluation of possible policy responses,”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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