A report from the European Central Bank (ECB) concludes that crypto-asset markets are not yet sufficiently large or interconnected with traditional finance to pose financial stability risks. However, it warns that if the current growth trajectory and market integration continue, the sector will pose a risk.
A Fidelity survey showed that 56% of European institutional investors have some exposure to crypto-assets, up from 45% in 2020. The central bank puts that down to new services making crypto more accessible such as crypto derivatives and ETFs. Additionally, it points to German legislation allowing institutional funds to put up to 20% of assets into crypto-assets.
Several international banks, including those in the Euro area, are trading and clearing regulated crypto derivatives, although the activity is on behalf of clients. More are considering offering custody services when the EU’s crypto regulations, MiCA come into force.
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