EU Financial Stability Chief Hints at Broad Cryptocurrency Regulation

A European Union official raised the possibility of outlining new regulatory framework and guidelines for cryptocurrency markets and ICOs across the EU.

In a speech delivered yesterday during a roundtable on cryptocurrencies, European Commission vice president Valdis Dombrovskis raised the possibility of introducing a broad EU regulatory framework after determining current guidelines surrounding ‘facts and circumstances around specific crypto-tokens.’

The official, who is also in charge of Financial Stability, Financial Services and Capital Markets Union in the EU, said the European Commission (EC) would assess existing regulations surrounding cryptocurrencies and related services that include fundraising through initial coin offerings.

He stated:

“Based on the assessment of risks and opportunities and the suitability of the existing regulatory framework for these instruments, the Commission will determine if regulatory action at EU level is required.”

The EU official has previously stated that cryptocurrencies, particularly bitcoin, had the EC’s ‘heightened attention’ citing investor risks in volatility, security failures leading to exchange thefts and more.

However, Dombrovskis expressed a markedly positive take on initial coin offerings. While touching upon investor risks due to a lack of transparency when it comes to ICO issuers and their business plans, the EC vice president said:

Initial Coin Offerings have become a way for innovative firms in this field to raise substantial amounts of funding.

Finally, the official also underlined an ongoing proposal by the EC to bring cryptocurrency exchanges and wallet providers under the anti-money laundering (AML) directive. The European Commission, which operates as the executive arm of the European Union, has previously proposed strict rules for the use of cryptocurrencies as well as a ‘central database’ for recording the identities of cryptocurrency users and wallet addresses. The latter proposal, in particular, has not gained any visible traction.

Still, “the Commission will continue to monitor these [cryptocurrency] markets” along with other entities at “EU and international level, including in the G20”, he stated, adding:

“We stand ready to take action based on an assessment of risks and opportunities.”

Featured image from Flickr/Valsts kanceleja/ State Chancellery.