European Policymakers Won’t Rush to Further Regulate Cryptos: Report

  • In a meeting in Vienna, Europeans leaders agreed they won't rush to further regulate the crypto market.
  • Instead, reports suggest they'll wait for a thorough report on it.

European Finance ministers have recently gathered in Vienna, in a meeting in which they addressed the growing cryptocurrency ecosystem. In it, they decided they aren’t rushing to further regulate the market.

Instead, Fortune reports, they’ll wait for a thorough analysis made by European authorities. Irish Finance Minister Paschal was quoted as saying the European Union (EU) will “be acting carefully in this area,” as the policymakers side with the Financial Stability Board, which earlier this year noted cryptos aren’t currently a threat to the financial system.

While the Finance Ministers policymakers aren’t in a rush to regulate the market, they have moved to increase its transparency. So far comprehensive regulations haven’t been drafted because the euro doesn’t represent the majority of bitcoin’s trading volume, but regulators reportedly worry about fraud in the market, and about cryptos being used for money laundering or terrorism financing.

The meeting in Vienna, per Fortune, was meant to make sure regulators in the EU are on the same page when it comes to whether crypto regulations are needed. Olaf Scholz, Germany’s Finance Minister, noted it ensured policymakers are “put in a position in which they’re able to act.” Per his words, “it’s obvious that we shouldn’t wait too long with that.”

As CryptoGlobe recently covered Bruegel, a Brussels-based think tank, called for EU-level regulations on cryptocurrencies, noting it should be scrutinized how exchanges operate and how cryptoassets are distributed in initial coin offerings (ICOs). Per the think tank “limiting the exposure of financial institutions” to cryptocurrencies would be “sensible.”

Regulators throughout the world, as Fortune noted, have been taking steps to reign over the crypto ecosystem. China cracked down on the industry, banning domestic crypto exchanges and ICOs last year. Its crackdown recently saw Baidu start censoring crypto discussions in its forums.

Japan, on the other hand, adopted an exchange-licensing regime and accepted bitcoin as a legal payment method in April of last year. The result was seemingly positive for the industry as CryptoCompare data shows the Japanese yen represents over 10% of bitcoin’s total trading volume.

EU regulators have, as covered, been considering tightening cryptocurrency regulations over transparency concerns. The crypto market has, since late last year, lost over 75% of its total value. Bitcoin, the flagship cryptocurrency, came down from a near $20,000 all-time high to about $6,200 at press time.

U.S. Congressman Proposes Bill to Outlaw Cryptocurrency Purchases

During a Financial Services Committee hearing held this Thursday (May 9, 2019) U.S. Congressman Bradley Sherman (D-California) proposed a bill to outlaw cryptocurrency purchases in the country over their potential to undermine the U.S. dollar.

Sherman’s concerns regarding the cryptocurrency space are based on its ability to undermine the U.S. dollar. The Congressman stated:

I look for colleagues to join with me in introducing a bill to outlaw cryptocurrency purchases by Americans, so that we nip this in the bud, in part because an awful lot of our international power comes from the fact that the dollar is the standard unit of international finance and transactions.

He added that cryptocurrencies have the ability to empower nations that have been sanctioned by the United States, claiming it is the “announced purpose of the supporters of cryptocurrency to take that power away from us,” and put the United States in a position where international sanctions are irrelevant.

Sherman’s concerns may here be somewhat justified, as embattled nations have been known to turn to cryptocurrencies. Venezuela, for example, launched an oil-backed cryptocurrency to raise funds and bypass international sanctions, while Iran launched a gold-backed crypto shortly after seeing its banks get banned from using the SWIFT financial messaging system.

The Congressman also referred to Hamas’ efforts to raise funds using bitcoin. As covered, the group’s military wing managed to raise $7,400 worth of the flagship cryptocurrency in a few months while experimenting with crypto.

Most in the cryptocurrency space believe a ban on cryptocurrency purchases in the United States is unlikely, given the cryptocurrency community’s strength in the county, and the support that has been shown to the industry so far.

Notably, this is the second time this month a high-profile figure calls for a ban on cryptocurrencies. As covered, renowned economist Joseph Stiglitz argued we should “shut down cryptocurrencies” after defending the U.S. dollar.

This is also not the first time Sherman himself attacks cryptocurrencies. Last July, he declared U.S. citizens should be prohibited from “buying or mining cryptocurrencies.” In front of a subcommittee.