With the crypto industry awaiting Markets in Crypto Assets Regulation (MiCA) and crypto exchanges and companies expanding to the EU region, a new probe by EU regulators may hinder crypto growth in the region. European Banking Authority (EBA) Chair José Manuel Campa said regulators would investigate funding and other links between sectors, bringing crypto in the crosshairs.
EU regulators will heighten scrutiny on links between banks and other financial firms such as hedge funds, private capital firms, and cryptocurrency groups on concerns over potential contagion to banks, reported FT on Jan 3.
“We should be doing more and we are going to be doing more. We need to have an understanding of the whole underlying chain in NBFIs,” said José Manuel Campa, Chair of the European Banking Authority.
Financial Stability Board data shows NBFIs hold almost half of the world’s financial assets worth around $218 trillion. Campa asserts this makes it imperative to probe risks posed by non-bank financial institutions (NBFIs) to banks, with crypto out of regulators’ reach.