EU will not regulate virtual currencies yet
For the time being, the European Union will only monitor and not regulate virtual currencies because there is currently too little known about virtual currencies to justify new rules on specific risks such as money laundering. This is the outcome of a hearing held Monday.
A spokesperson also calls virtual currencies “hyped” at the moment and according to him it should be realized that there are currently only about 600 virtual currencies. Bitcoin already accounts for about 90 percent of those 600 virtual currencies in a market that is worth about 7 billion dollars. Regular foreign exchange trade amounts to about $5 trillion every day.
After the terrorist attacks in Paris last November, policymakers wanted to make sure that virtual currencies are not used to finance terrorism. Despite the European Commission’s power to regulate the entire union, EC head of staff and budget Olivier Salles told the EU’s Economic and Monetary Affairs Committee at the hearing that she would rather focus on controlling virtual currencies rather than imposing new rules. According to him, it is easy to make mistakes when there is regulation. Salles says they first want to know better what exactly is going on. Although money laundering via virtual currencies is monitored, there is no rush to regulate virtual currencies.
Economist Sean Ennis of the OECD says the EU should learn from Britain because with fewer rules around peer-to-peer lending, the fintech sector there is growing much faster than in the rest of Europe. Ennis also cites a recently released IMF paper on virtual currencies stating that regulation should align with risk and not get in the way of innovation.
In addition, the majority of bitcoin transactions are carried out by just 20 companies, which means that a lot of ‘normal’ money circulates in this sector, says technology consultant Jeremy Millar. Companies and activities are already regulated in this way, so that regulating the technology itself is no longer necessary as soon as possible, Miller said during the hearing.
Source: European Parliament live stream. Start virtual currency hearing from 9:50 am