The European Securities and Markets Authority (ESMA) does not see any threat to EU financial stability from the DeFi market.
The regulator's report, published late last week, states that digital currencies deployed in DeFi protocols are a nascent ecosystem.
The scale of investment in its projects remains small, so the industry does not pose a threat to the banking sector.
ESMA analysts emphasized:
Cryptocurrency markets, including DeFi, do not currently pose financial stability risks due to their small size and limited channels for interaction between traditional markets and digital asset ecosystems.
The total capitalization of cryptocurrencies is now just over $1 trillion, and the value of digital assets locked in DeFi projects does not exceed $40 billion. This is evidenced by data from the DeFiLlama platform.
The European Commission estimates that EU financial institutions have accumulated assets worth about $90 trillion. ESMA noted that the total capitalization of the crypto market is comparable to the volume of assets of one large European bank.
EU law enforcement agencies have concluded that criminal organizations are using DeFi protocols for money laundering.
Europol also found that in addition to DeFi, criminal communities also use NFT collections.
