European Parliament Comittee Sees No Need in Direct Regulation of Cryptocurrencies

News and Analysis

The European Parliament’s Committee for Economic and Monetary Affairs has approved a report on cryptocurrency regulation approaches in a majority vote. In the committee’s opinion, the EU should restrict itself from direct regulation of bitcoin and other virtual currencies, and adhere to a ‘softer’ approach to regulation of blockchain-based financial services.

The report released this February implies the establishment of common European working group on digital currencies. The group will be tasked to monitor and regulate innovations in cryptocurrency realm across member nations, as well as to maintain the security of citizens using cryptocurrencies, and bitcoin in particular. The committee’s report also considers bringing bitcoin regulation into compliance with prevailing AML rules.

“We don’t want pre-emptive regulation, but we do want precautionary monitoring,” Jakob von Weizsäcker, author of the report and representative for Germany, told Reuters.

Blockchain enthusiasts believe distributed ledgers may be successfully employed in finance. However, the parliament doesn’t see any solutions appropriate for financial institutions like central banks or SWIFT system.

“One reason why regulating now in detail would be difficult is that we don’t know yet what the most important use of blockchain might be,” von Weizsäcker commented on the committee’s stance.

Notably, last week European parliament members of the Committee on the Internal Market and Consumer Protection made a stand for virtual currencies and voted aye for creation of an operative group.

Back then, the committee’s member Ulrike Trebesius said that there is only a minor evidence of cryptocurrency’s illegal use, so users should decide which technologies to trust.

The parliament’s representative for Lithuania, Antanas Guoga went even further by offering the attendees to try bitcoins out first to understand what it actually is. Otherwise, the representative said, the officials may end up trying to regulate something they have no idea about.

“The biggest risk is for us to be very conservative and damage this evolution in Europe and damage this research. The United Kingdom is being very proactive. They’ve invested money […] to research, to develop it, because it’s blockchain technology. It is taking the world further onwards in a very fast leap and bounce. It’s perfect technology. I really love it and I would suggest everybody to be positive about it. We need a positive vote,” the representative stated.

In case of approval of the European Parliament this May, the Union will produce a common and relatively soft approach to virtual currencies under the auspices of an operative working group on cryptocurrency supervision.


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