The EU securities regulator flagged tokenized equities, DeFi exploits and prediction markets as areas where growing crypto ties could pose risks to the broader financial system. Europe’s securities regulator has warned that growing links between crypto and traditional finance could increase the risk of shocks spreading across the broader financial system. In its latest risk monitoring report published Thursday, the European Securities and Markets Authority (ESMA) called for closer monitoring of the “growing linkage between increasingly vulnerable crypto-asset markets and the broader financial system.” ESMA pointed to growing adoption of tokenized equities and recent decentralized finance (DeFi) exploits as areas that could deepen links between crypto and traditional markets and increase the potential for financial spillovers. Read more
The amendment would require the UK Treasury to develop a strategy covering cryptoassets, stablecoins, tokenized securities and digital financial infrastructure. The UK House of Lords backed an amendment requiring the government to develop a digital asset strategy, in a 194–138 vote on Wednesday, despite the Labour government’s opposition to the measure. The amendment was added to the Financial Services and Markets Bill during its Report Stage on Wednesday. The bill is progressing through Parliament and would make broader changes to the UK’s financial services regulatory framework. Amendment 88, introduced by Conservative peer Baroness Neville-Rolfe, would require the Treasury to prepare, publish and consult on a digital asset strategy within 12 months of the Financial Services and Markets Bill becoming law. Read more