The European Union is prepared to regulate cryptocurrency at the federal level if other solutions are not found, according to Reuters.
The comments were made at a roundtable discussion hosted by Valdis Dombrovskis, Vice-President of the European Commission and current European Commissioner for the Euro and Social Dialogue. It was attended by industry bodies including the European Central Bank and the Financial Stability Board, which is responsible for coordinating regulation for the G20.
The discussion covered a number of topics – first, that Europe must adapt to blockchain technology in order to remain competitive. Second, that investors must be warned about the dangers of cryptocurrency speculation, which has become rampant. Third, that initial coin offerings bring both opportunity and danger to the market.
It was also identified that before cryptocurrency can be regulated, the extent to which it already is must be confirmed, that is, “under what circumstances crypto-currencies and related services are covered by existing regulation.”
Dombrovskis noted during the discussion that the EU is responsible for a relatively modest slice of the cryptocurrency economy, and so it is essential that standards are set internationally.
The discussion was a prelude to the next G20 meeting, to be held in Argentina in March. The finance ministers of both Germany and France (Peter Altmaier and Bruno Le Maire respectively) have called for the subject to be discussed at that meeting. Le Maire told reporters last Thursday that “a joint Franco-German analysis of the risks linked to bitcoin [and] regulation proposals … will be submitted as a joint proposal to our G20 counterparts at the G20 summit in Argentina in March.”
Altmaier agreed: “We have a responsibility towards our citizens to explain and reduce the risks.”
As reported by The Guardian, Dombrovskis told reporters after the meeting: “This 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 at the EU level if we see, for example, risks emerging but no clear international response emerging.”
Meanwhile, the European Central Bank announced at the beginning of the month that it can beat cryptocurrency at its own game with its own new payment system, TIPS (‘TARGET instant payment settlement’). It claims that the system will offer instant, free transactions by allowing participating banks to “set aside part of their liquidity on a dedicated account opened with their central bank, from which instant payments could be settled around the clock.”
The system has already been approved, and the planned launched date is November 2018.
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