Bitcoin Due to Get a Watchdog, via the European Union

The European Parliament has voted in a non-binding resolution today which approved a proposal for a taskforce looking into virtual currencies like bitcoin and blockchain technology.

A proposal from late February, which sought to form a bitcoin- and blockchain-centric taskforce overseen by the European Commission, the executive arm of the European Union, was approved by the European Parliament in a majority vote today.

The call for a task force is to study the technology to understand the risks and opportunities of virtual currencies (VC) and distributed ledger, or blockchain technology (DLT).

The vote to establish a task force comes soon after the final report put forth by the European Parliament’s Committee on Economic and Monetary Affairs (ECON), earlier this month. In it, the ECON recommends that the EU Commission consider revising EU payment laws, on the basis of its assessment of virtual currencies and blockchain technology.

With law-altering potential inherent with bitcoin and blockchain as innovations, the original proposal warned against a heavy-handed approach to the technology. A press release by the European Parliament, the legislative branch of the European Union, underlines the same notion, noting that the proposal for a task force underlines the significant opportunities in consumer and economic development.

The original proposal was drafted by Jakob von Weizsäcker, a European Parliament & ECON member. In a statement today, he added:

To avoid stifling innovation, we favour precautionary monitoring rather than pre-emptive regulation. But IT innovations can spread very rapidly and become systemic. That’s why we call on the Commission to establish a taskforce to actively monitor how the technology evolves and to make timely proposals for specific regulation if, and when, the need arises.

Furthermore, the Commission is also deliberating proposals to amend the Anti-Money Laundering Directive, in order to bring virtual currency exchanges under its purview. Such a move, if enforced, will effectively kill the anonymity of bitcoin transactions through exchanges.

The proposal for the taskforce was passed by 541 votes to 51, with 11 members abstaining. Following the vote, European Commission will now consider the proposal.

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