Cryptocurrency Under the Spotlight as E.U. Finance Ministers Meet
Amidst the ongoing atmosphere of regulatory ambiguity regarding cryptocurrencies and digital assets in the world’s largest trading area, E.U. finance ministers are set to meet yet again to hold some discussions on the topic of regulating the issuance and trade of virtual currencies. On August 29, 2018, a Bloomberg report stated that crypto has now become a political issue among E.U. member states.
KYC and AML Concerns
One of the EU’s biggest bugbears about digital assets is the fact that their relative anonymity and sheer mobility makes them prime candidates for use as vehicles for money laundering, tax evasion, and terror financing. On September 7, 2018, finance ministers from the E.U.’s 27 member states will meet again to discuss how to get around these challenges using regulatory power.
A draft note prepared for the conference set to hold in Vienna states that concerns to be discussed include a general lack of transparency and the potential of the asset class to be used to facilitate money laundering, evade taxes and fund terror.
The ministers will debate the possibility of tightening existing rules to closing all existing loopholes and eventually making it possible for the European States and crypto to coexist without butting heads.
At press time, no comment was available from the Austrian government, which is the E.U.’s but analysts agree that the E.U., like other regulators around the world, is struggling to keep a handle on cryptocurrencies and the potential they hold, for good and otherwise.
While a China-style cryptocurrency crackdown seems extreme for Europe, some have suggested following the Japanese exchange-licensing model where crypto exchanges are directly regulated by the Japanese Financial Services Agency (FSA).
To Crypto or Not to Crypto?
The notorious volatility of the crypto market has spooked authorities in Europe who are concerned about its potential for wreaking socio-economic havoc, especially given that under European law, investors are not offered any protection. To this end, the European Commission has previously pledged to keep an eye on development on the crypto scene and advise partner agencies of any need for future action.
According to the unreleased draft note for the Vienna meeting, European regulators remain keen on making use of the possibilities opened by digital currencies, which ties in with recent development in the European cryptosphere.
The document singles out ICOs, stating that they have “established an effective and efficient way to raise capital.” This development the note said, could go some way toward achieving increased capital market integration within the bloc, which would substantially increase European economic growth.
In June 2018, BTCManager reported that European countries came together to form a blockchain partnership dedicated to exploring how blockchain technology can aid the bloc in governance, service delivery, and economic integration.