The European Union’s financial chief has said that if issues related to cryptocurrencies aren’t addressed it will take steps to regulate the market.
Valdis Dombrovskis, the EU’s financial chief, was speaking yesterday at a roundtable meeting that was attended by the European Central Bank (ECB), industry bodies, and the Financial Stability Board (FSB), reports the Guardian. It is the FSB who write and coordinates regulation for G20 economies. Dombrovskis said:
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.
The rising interest in cryptocurrencies has seen plenty of people make a significant profit. Notably, though, a drop in prices at the beginning of the new year has seen many more suffer severe losses. As a result of its volatile and speculative nature many global regulators have called for cryptocurrencies to be regulated. It’s thought that by bringing them into line with financial legislation it will help to tackle terrorism financing and money laundering.
Markus Ferber, a centre-right member of the European parliament, has also spoken out and said at the meeting that an EU response was required, adding:
In order to make sure that retail investors do not fall prey to market manipulation and fraud, virtual currencies should be regulated as other financial instruments.
Interestingly, Daniele Nouy, the ECB’s chief supervisor, said earlier this month that regulating cryptocurrencies wasn’t a priority for the European central bank. At the time, Nouy said:
We scrutinize the issue in a regulatory perspective, we are ready to do something if it was needed, but so far it’s not exactly very high on our to-do list.
Mario Draghi, the chief of the ECB, has also said that the impact from digital currencies such as bitcoin was ‘limited’ and didn’t pose a threat to the ECB. So while EU leaders are calling for the market to be regulated it seems that there is no strong consensus among them to regulate them closely.
Featured image from Shutterstock.
