The European Union's securities watchdog warned on Tuesday that problems in the cryptocurrency industry could pose risks to broader financial stability in future, as the sector grows and as ties between it and traditional financial markets increase. The appeal for caution from the European Securities and Markets Authority (ESMA) comes as U.S. economic policies roil global markets and U.S. authorities look to remove some of the barriers between crypto and traditional banking sectors. "EU financial markets are, as we speak, under severe strain coming from the broader political and geopolitical developments," ESMA executive director Natasha Cazenave said in a speech to the European Parliament posted on the watchdog's website.