Cryptocurrency Is Top of Mind for at Least One EU Commissioner
A European Union commissioner is planning to hold a “high level roundtable” on cryptocurrency, according to a press release that was published following Tuesday’s Ecofin meeting. Valdis Dombrovskis, who currently serves as Vice President for Euro and Social Dialogue, says he plans to table the issue with a group of officials that have yet to be named.
Ecofin Addresses Need for Cryptocurrency Regulation
The Economic and Financial Affairs (Ecofin) Council concluded its monthly session on Tuesday with plans to continue a discussion on cryptocurrencies. Remarks published on the EU website quoting Dombrovskis suggested that officials were closely monitoring developments in the cryptocurrency market, and are looking for ways to police the ever-evolving landscape.
“In terms of financial services legislation: I made some suggestions on how the EU should approach cryptocurrencies,” Dombrovskis said, according to the release.
He added: “Make no mistake: We want Europe to embrace the opportunities of blockchain, the technology underlying cryptocurrencies. But to do so, we must be vigilant and prevent cryptocurrencies from becoming a token for unlawful behaviour.”
Dombrovskis also said that the full ramifications of cryptocurrencies are not yet understood. For this reason, he plans to invite “key authorities and the private sector” to a roundtable discussion shortly to assess the situation over the long term.
New Legislation on the Way?
Last week, Luxembourg’s Finance Minister Pierre Gramegna indicated the EU may soon unveil new regulations targeting cryptocurrencies. Although he didn’t specify what measures would be adopted, Gramegna expressed concerns over money laundering.
Despite hinting at new regulations, the Finance Minister didn’t offer any details about whether new legislation was being proposed. In terms of regulations (or lack thereof), the EU has been one of the more favorable jurisdictions for cryptocurrency traders as well as blockchain companies.
Some cryptocurrencies make it difficult or virtually impossible to track payments over the blockchain, a feature that no doubt appeals to elements of the criminal underworld. Monero has already emerged as one of the more popular coins for ransomware attacks. Experts say Zcash also offers unique protection against surveillance because it obscures the actually wallet address of the sender.
South Korea recently became the latest jurisdiction to clamp down on cryptocurrencies, although the new measures pale in comparison to what had been speculated earlier by the media. On Tuesday, Seoul announced it would ban anonymous cryptocurrency accounts beginning Jan. 30.
Elsewhere, China has already banned cryptocurrency trading while Russia is mulling a similar approach. Earlier this month, the Russian Finance Ministry drafted new legislation to legalize cryptocurrency trading on major exchanges, with plans to table the bill to a vote next month.
As recent market activity clearly demonstrated, investors are concerned that lawmakers will go too far in regulating cryptocurrencies. Without access to the major cryptocurrency exchanges, traders won’t be able to fund their accounts as easily as before. Although traders have many ways to circumnavigate a ban, heavy sales usually follow any announcement of new regulatory hurdles.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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