Crypto Shows All the Signs of Financial Stability Risk, ECB Says

A dramatic increase in the size and complexity of crypto markets means the sector is on track to become a risk for financial stability that must urgently be regulated, the European Central Bank said.

While recent volatility has not proved contagious to the rest of the global financial system, the threat is increasing with institutional investors increasingly involved, the ECB said in a pre-released chapter from its financial stability review.

“Based on the developments observed to date, crypto-asset markets currently show all the signs of an emerging financial stability risk,” the central bank said. “As this is a global market ...