European Commission Prepared to Act on Bitcoin Regulation

The European Commission recently held a roundtable discussion on cryptocurrencies, which was attended by representatives of the European Central Bank, the Financial Stability Board and various industry groups, reports the Guardian.

According to Vice-President Dombrovskis, who hosted the meeting, its purpose was to feed into the Commission’s upcoming Action Plan on FinTech, and the EU’s position for a possible discussion at G20 level. The meeting focused on three main topics:

• the implications of cryptocurrencies for financial markets,
• the risks and the opportunities associated with their use,
• and the recent development of Initial Coin Offerings.

Vice-President Dombrovskis reports that following discussions, the roundtable came to a number of conclusions, including that:

• Blockchain technology holds strong promise for financial markets, and Europe must embrace this innovation to remain competitive.
• Cryptocurrencies, which are not currencies in the traditional sense, and whose value is not guaranteed, have become subject of considerable speculation, which exposes consumers and investors to substantial risk including the risk to lose their investment. Therefore warnings about these risks to consumers and investors must be clear, frequent, and across all jurisdictions.
• There is a need to assess further under what circumstances cryptocurrencies and related services are covered by existing regulation.

Vice-President Dombrovskis added that based on the assessment of risks and opportunities and the suitability of the existing regulatory framework, the Commission will determine if regulatory action at EU level is required, and will be ready to take action should it be deemed necessary.