EU Watchdog Suggests Limiting Leverage for Crypto Trading
In a statement on Thursday, May 25, the EU watchdog said that it is working to stop shocks that would jeopardize the financial stability elsewhere. The European Systemic Risk Board made several recommendations ranging from asking all crypto firms to submit regular reports as well as introducing specific rules for some of the biggest players in the space. In its report, the ESRB said: advertisement “Systemic risks could arise quickly and suddenly. If the rapid growth trends observed in recent years were to continue, crypto-assets could pose risks to financial stability.” Thus, they have proposed a few changes to the recently passed MiCA regulations such as “introducing leverage limits for investment funds exposed to crypto-assets”. Additionally, the ESRB also called for limiting the crypto firm’s ability to lend tokens to its clients, which has been one of the popular ways of making high-leveraged bets. Furthermore, the ESRB asked f...