Finance

EU moves toward crypto regulation

A neon sign hanging in the window of Healthy Harvest Indoor Gardening in Hillsboro, Ore., shows that the business accepts bitcoin as payment (AP).

Brussels, Belgium—The European Union seeks to reach an agreement over cryptocurrency regulation.

EU financial regulators and finance ministers have been monitoring and discussing the steady growth of crypto assets with some concern.  Now, they are pushing toward an agreement on how to regulate the emerging market.

“Currently there is a diversity of approaches, but at some point, we need to forge an approach,” said an EU official following another inconclusive meeting.

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Brussels, Belgium—The European Union seeks to reach an agreement over cryptocurrency regulation.

EU financial regulators and finance ministers have been monitoring and discussing the steady growth of crypto assets with some concern.  Now, they are pushing toward an agreement on how to regulate the emerging market.

“Currently there is a diversity of approaches, but at some point, we need to forge an approach,” said an EU official following another inconclusive meeting.

It is the lack of transparency that worries EU decision-makers and regulators the most. Money-laundering is on the rise on the Continent. Russian oligarchs, particularly, are suspected of manipulating the fluid crypto assets market to their advantage.

“To combat money laundering effectively, Europe needs a European anti-money laundering authority,” said Sven Giegold, a German member of the European Parliament.

The principal crypto assets are the digital currencies (for example, Bitcoin, Ethereum, Litecoin, among others). However, crypto assets also contain Initial Coin Offerings (ICOs), which are bought in exchange for utility tokens or securities tokens.

In 2018 alone, the ICOs market is valued at around $18 billion, a marked increase from the last two years (in 2017, the market’s value was almost $6 billion, and in 2016, only a few hundred million).

Recently, the European Securities and Markets Authority (ESMA) conducted an investigation into the status of crypto assets within each member-state. The research’s primary aim was to determine if eurozone countries perceive digital currency as a financial asset or not; the study’s secondary objective was to determine if current EU regulations could be applied to crypto assets.

Numerous European banks have shown increasing interest in crypto assets. In response, the European Banking Authority (EBA), a regulatory agency of the European Union, is reviewing the potential risks.

“We have been pretty negative,” said an EBA official.

And they do have a reason.

The crypto assets market is very unstable. Bitcoin, for instance, dropped from close to $20,000 in December to $7,000 in the span of few months. And similar volatility can be found in Ethereum, which has fallen from around $1,200 in the start of the year to just $250 in September. The crypto assets market is currently worth around $200 billion—it had reached a remarkable $800 billion earlier in the year.

“EU policymakers need to agree on the right moment to move supervision of crypto assets from the national level to the EU level,” stated a report by the Bruegel Think-tank, a highly influential lobby group based in Brussels, Belgium.

About Stavros Atlamazoglou View All Posts

Managing Editor. Greek Army veteran (National service with 575th Marines Battalion and Army HQ). Johns Hopkins University. You will usually find him on the top of a mountain admiring the view and wondering how he got there. You can reach him at Stavros@sofrep.com.

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