The US cryptic attitude could increase the level of risk in the financial markets by elaborating on links between traditional funding (tradfi) and the digital active economy, according to the regulator European Securities and Markets Authority.

“This crypto-friendly attitude has the potential to accelerate crypto uptake, including by institutional investors,” a spokesman for the European Union’s financial market’s regulator said in an interview. “This would again increase the interconnection and, fail relevant protective measures, risk negative waste effects between crypto and traditional markets.”

Since becoming President on January 20, Donald Trump has ordered his administration to set up a Bitcoin reserve and encouraged it to establish crypto -related policies. The Crypto market had already responded positively to Trump’s election victory in November, and Bitcoin (BTC) climbed up to a record high around $ 109,000 the day he was sworn in, Coindesk showed data.

In a joint report published on Monday, ESMA, European Banking Authority and European Insurance and Excurational Pensions Authority identified fleeting crypto assets valuations, driven by expectations of US deregulating political agenda; rising interconnections to traditional financial markets “as an important driver in financial markets.

Separately called on Piero Cipollone, an executive member of the European Central Bank, to a digital euro, an ECB-supported digital version of the individual currency, to replace crypto assets, which he described as “very unstable and speculative in nature.”

“In addition, the United States’ push to preserve dollars global dominance through the promotion of stableecoins worldwide, his own set of challenges,” he said.