According to CoinDesk, in a joint report released on April 1st, the three major regulatory agencies of the European Union, including ESMA, pointed out that the increasingly crypto friendly policy stance of the United States is deepening the linkage between cryptocurrency assets and traditional financial markets, which may increase systemic risks. The report mentioned that the expected increase in cryptocurrency valuation volatility due to US regulatory policies may trigger negative spillover effects on traditional finance if there is a lack of corresponding protection. ECB officials have also called for the development of a digital euro to address the high volatility of cryptocurrency assets and the global expansion of stablecoins dominated by the US dollar.
