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The European Union is ready to regulate cryptocurrencies. This is what Valdis Dombrovskis commented during a roundtable meeting attended by the European Central Bank (ECB), industry bodies and other important offices. In March, the G-20 will host the 2nd Meeting of Finance and Central Bank Deputies, where cryptocurrency and bitcoin regulations will be debated as one of the key points.
European Union Cryptocurrency Regulations
The European Union (EU) seems very worried about the implications that the Bitcoin rise may have in the economy and the society. The meeting was focused on three major points: the implications of cryptocurrencies for financial markets, the risks and the opportunities associated with their use, and the recent development of Initial Coin Offerings (ICOs).
The intention of the roundtable meeting was to discuss European Union’s position on the matter before the G-20 summit in Buenos Aires, where crypto regulations will be debated.
Mr Dombrovskis commented about that:
“This is a global phenomenon and it’s important there is an international follow-up at the global level. We do not exclude the possibility to move ahead (by regulating cryptocurrencies) at the EU level if we see, for example, risks emerging but no clear international response emerging.”
Individuals, investors and enterprises have been making significant profit with cryptocurrencies. This situation has called government’s attention and they are trying to regulate the market. Furthermore, virtual currencies have been associated with money laundering and other criminal activities.
Initial Coin Offerings have also been increasing as ways of gathering money for different start ups and enterprises. In some countries, ICOs have been scams and the owners have disappeared after receiving important sums of money. This situation has led to warnings from governments and even banning them in China or South Korea.
Apparently, the European Union is trying to find ways to regulate cryptocurrency assets. At Monday’s event, Dombrovskis suggested:
“This depends very much on the facts and circumstances around specific crypto-tokens. 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.”
European Union Banks May Hold Bitcoin Positions
Due to the increase attention and interest that the society is having for cryptocurrencies, banks in the European Union may soon start to hold Bitcoin positions. According to Mario Draghi, European Central Bank (ECB) president, said that banks may be interested in holding Bitcoin so as to improve their investments.
Mr Draghi commented while speaking at the European Parliament on February the 5th:
“However, recent developments, such as the listing of Bitcoin futures contracts by US exchanges, could lead European banks too to hold positions in Bitcoin, and therefore we will certainly look at that.”
He has also said that even when the level of public interest for cryptocurrencies and bitcoin is high, the ECB does not observe a systemically relevant holding of digital currencies by supervised institutions or banks.
After commenting this, Mr Draghi warned investors and enterprises that virtual currencies and other digital assets are very risky and that banks should be careful when investing in them.