Commissioner for Financial Stability, Financial Services and Capital Markets Union, Valdis Dombrovskis of the European Union (EU), is urging a broader regulatory regime upon cryptocurrencies, and is threatening an EU move especially if there appears to be no global consensus on how to address the decentralized currency phenomenon.
EU Financial Commissioner Urges Global Crypto Regulation
Valdis Dombrovskis, Vice-President of the European Commission, warned, “[Bitcoin] is a global phenomenon and it’s important there is an international follow-up at the global level. We do not exclude the possibility to move ahead (by regulating cryptocurrencies) at the EU level if we see, for example, risks emerging but no clear international response emerging.”
Mr. Dombrovskis’ remarks were delivered this week in Brussels at a an EU Commission meeting termed Roundtable on cryptocurrencies. The agency “aims to ensure investor protection, market integrity and financial stability while taking full advantage of the new technological developments,” according to its website.
Participants in the “Cryptocurrencies – Opportunities and Risks, exchanged views on how the EU institutions, supervisors and Member States should respond to the challenges posed by fast technological developments, and seize the opportunities they offer. So-called cryptocurrencies (virtual currencies) and their underlying blockchain technology are affecting many sectors of the economy, including finance,” the site explained.
The Commission plans to use the discussion at Brussels to inform broader policy as they head into the G20 meetings later in Argentina. “The discussion was organised around three themes: cryptocurrencies and their implications for financial markets, investor protection and market integrity in relation to cryptocurrencies as an emerging asset class, and the potential and challenges posed by initial coin offerings,” they detailed.
Clear, Frequent, and Across All Jurisdictions
For his part, Mr. Dombrovskis urged the roundtable to follow up on an existing Franco-German letter concerned with crypto regulation. “Crypto-asset markets are global, with worldwide transactions between investors, consumers and intermediaries,” he said. “On its own, Europe represents only a small share of global cryptocurrency trading, so we need to work together with our partners in the G20 and international standard-setters.”
After applauding “blockchain technology,” the Vice President outlined issues he felt were previously unaddressed: Cryptocurrencies “which are not currencies in the traditional sense, and whose value is not guaranteed, have become subject of considerable speculation. This exposes consumers and investors to substantial risk including the risk to lose their investment. This is why our third conclusion is that warnings about these risks to consumers and investors are important: these must be clear, frequent, and across all jurisdictions.”
For good measure, he was careful not to miss initial coin offerings (ICOs), which he termed an “opportunity” but ultimately “there are also problems that expose investors to substantial risk, such as the lack of transparency regarding the identity of the issuers and underlying business plans.”
Perhaps the most ominous of his remarks were saved for the very end, as he pounded home the point “crypto-assets present risks relating to money laundering and the financing of illicit activities. That is why the Commission proposed that virtual currency exchanges and wallet providers should be subject to the Anti-Money Laundering Directive. The co-legislators reached an agreement in December, and we invite Member States to prepare for a speedy transposition of this legislation. To sum up, the Commission will continue to monitor these markets together with other stakeholders, at EU and international level, including in the G20. We stand ready to take action based on an assessment of risks and opportunities,” he insisted.
What do you think of the EU’s proposals? Let us know in the comments section below.
Images courtesy of Pixabay, EU.
Not up to date on the news? Listen to This Week in Bitcoin, a podcast updated each Friday.