By : COIN GABBAR
01 Jun 2022

Rising inflation could drive investors to cryptocurrency, according to a European regulator

Rising inflation could drive investors to cryptocurrency, according to a European regulator

According to Europe's top security regulator, Soaring inflation could drive traders to cryptocurrencies. The regulator emphasizes that each EU country's approach to crypto is "unbalanced," and advocates for a uniform regulatory regime across Europe.

According to the source, the European Securities and Markets Authority (ESMA), the EU's main securities markets regulator, has warned that rising inflation could lure individual investors to cryptocurrencies.

The regulator has also requested that the crypto industry be governed by a formal legislative framework that applies to all EU countries.

In an interview last week, ESMA Chair Verena Ross said: "With inflation growing, investors will look for assets that can try to compensate for inflation and deliver higher returns, which may lead to greater risk-taking."

Many investors, notably renowned hedge fund manager Paul Tudor Jones, feel bitcoin is an excellent inflation hedge. The digital asset, on the other hand, is extremely unpredictable, having dropped 26% in the last 30 days. The crypto market as a whole has lost about $500 billion this month.

Currently, each EU country establishes its own crypto rules, depending on local laws. The crypto industry lacks a unified foundation. Because there is currently no EU regulatory framework for these types of businesses, there is an asymmetry in how national regulators deal with and judge them, according to the ESMA chair.

The Markets in Crypto Assets (MiCA) bill is currently being debated by the European Parliament and the European Council. The Act, which takes effect in 2020, establishes a legal foundation for the development of crypto-asset markets in the EU.