⚡️🇪🇺 NEW - EU warns of financial stability risks associated with growth of crypto sector.

The European Securities and Markets Authority (ESMA) has issued a warning about the potential risks to financial stability posed by cryptocurrencies.

ESMA's concerns focus particularly on stablecoins, which could have wider market repercussions due to their link to other financial assets.

ESMA Executive Director Natasha Cazenave addressed the European Parliament, stressing that while the current size of the crypto market does not pose an immediate threat to EU financial stability, continued oversight is essential.

"Cryptocurrency markets are still relatively small. However, in the current context, turbulence, even in small markets, can catalyze broader stability issues within our financial system."

Cazenave assures that the risks are not yet significant, pointing out that crypto-focused funds represent less than 1% of European funds.

What's more, she says, 95% of banks in the European Union are not involved in cryptocurrencies.