The ECB stated in a chapter that was pre-released from its Financial Stability Review that even though recent volatility hasn’t spread to the rest of the world’s financial system, the threat is getting bigger as more institutional investors get involved.
According to the data, retail investors account for a large part of the crypto-asset investor base:
“Recent results from the ECB’s Consumer Expectation Survey (CES) for six large euro area countries indicate, based on experimental questions, that as many as 10% of households may own crypto-assets.”
The ECB added:
“As this is a global market and therefore a global issue, global coordination of regulatory measures is necessary. Based on the developments observed to date, crypto-asset markets currently show all the signs of an emerging financial stability risk.”
Wealthiest most likely to own some crypto
According to the ECB’s Consumer Expectations Survey, an average of 10% of homes in the six countries where the poll is conducted own crypto-assets, with the ratio ranging from 6% in France to 14% in the Netherlands.
Approximately 37% of respondents reported having cryptocurrency worth up to 999 euros ($1,065), while 29% held between 1,000 and 4,999 euros, and 13% held between 5,000 and 9,999 euros.
While the wealthiest 20% in each country were the most likely to own cryptocurrencies, a greater proportion of lower-income families were reported to hold more cryptos than those in the middle ground.
“On average, young adult males and highly educated respondents were more likely to invest in crypto-assets in the countries surveyed. With regard to financial literacy, respondents who scored either at the top level or the bottom level in terms of financial literacy scores were highly likely to hold crypto-assets.”
ECB survey crypto-assets in EU: Source: ECB
Crypto regulation issues
The European Central Bank (ECB) reaffirmed its long-held opinion that the crypto assets were not suitable for the vast majority of ordinary investors and urged the regulatory bodies of the European Union to “urgently” enact new regulations controlling crypto assets.
The European Central Bank believes that due to the rapid growth in size and complexity of crypto markets, this industry is on the verge of posing a threat to the nation’s financial stability and must be regulated immediately.
Christine Lagarde, the president of the European Central Bank, recently shared her opinions on the value of cryptocurrency assets, saying, “my very humble assessment is that it is worth nothing.”
