EU Urges Global Cryptocurrency Regulation Development
Valdis Dombrovskis, EU Commissioner for Financial Stability, Financial Services and Capital Markets Union, made an official statement declaring that broader regulatory regimes have to be developed in regards with cryptocurrencies. The statement came with a threat that the EU will take actions in the event that global consensus does not appear in relation to how to address decentralized currencies.
Dombrovskis said that Bitcoin is now a "global phenomenon" so it is really important for things to happen at an international level. Regulating cryptocurrencies is something that the European Union is considering in the event that risks appear and there are no real responses that emerge.
The remarks were delivered at a meeting in Brussels that was discussing cryptocurrencies. Participants talked about how institutions in the EU and Member States supervisors have to respond to challenges posed by technological developments. During talks, it was mentioned that decentralized currency and blockchain technology affects the entire company.
Brussels discussions are going to be used by the EU Commission in order to inform the general public while there will be G20 meetings held in Argentina. Discussions were organized among 3 themes:
- Cryptocurrencies and implications in financial markets.
- Protecting market integrity and investors interested in cryptocurrencies.
- Challenges and potential posed by old, current and future ICOs (initial coin offerings).
The Need For Crypto Regulations
Dombrovskis urged participants to do their part and follow up on a past Franco-German letter that was about crypto regulation. It was stated that the crypto-asset markets have worldwide transactions being done between consumers, intermediaries and consumers. He went on to say that Europe is just a small part of the entire global cryptocurrency phenomenon so it is important for the EU to work with partners at the international level and in G20.
It needs to be added that Dombrovskis did applaud blockchain technology as a whole. However, he does feel that there are various issues that are not properly addressed, like cryptocurrencies not being traditional currencies and that values are not guaranteed. This opens the doors to speculation. The EU declared that their official conclusion is that there needs to be a strict set of guidelines developed to warn people about risks. In addition, they have to be frequent, clear and spread across all European jurisdictions.
The mention of ICOs was most likely done because of the fact that these are associated with investments in new, emerging cryptocurrencies. Dombrovskis labeled these as being an opportunity but did go on to say there are problems exposing interested investors to risk, like transparency problems in regards to underlying business plans and issuer identity.
Out of all that Mr. Dombrovskis said, the last remarks were those that were the most interesting. He did talk about the fact that crypto-assets are a risk for financing different illicit activities, with money laundering being particularly concerning. The EU Commission doe propose the fact that wallet providers and virtual currency exchanges need to be affected by the EU Anti-Money Laundering Directive. Basically, the Commission is going to continue monitoring markets and will take the necessary steps to protect users if it has to.