The head of the European Central Bank (ECB) addressed the European Parliament, where she expressed her conviction in the need for more careful control over the crypto market against the backdrop of impending inflation.
Christine Lagarde is convinced that crypto lending needs separate regulations.
The attention of the ECB has been drawn to a procedure available in Proof-of-Stake (PoS) protocols that allows multiple crypto token holders to pool assets by granting the staking pool operator validator status and rewarding all participants with tokens for their computing resources.
According to Lagarde, the field of lending to crypto assets is becoming more and more popular. The official suggests that the trend requires additional efforts on the part of the European Union. Lagarde believes that the EU needs to create MiCa 2, a second regulatory package, separate from the main one, that would regulate staking:
“Innovation in this unexplored segment of the crypto market could put consumers at risk. Lack of regulation will definitely lead to an increase in fraud, speculation and criminal transactions.”
Separately, the official mentioned decentralized finance (DeFi), which, in her opinion, also poses a real risk to financial stability and, therefore, also needs a separate regulatory framework.
Earlier, the ECB said that the high correlation between the cryptocurrency and stock markets will no longer allow diversifying the investment portfolio with digital assets.
Source: Bits
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