Although increasingly unstable, interest in cryptocurrency continues to persist in Europe undaunted.
Valdis Dombrovskis, vice president of the European Commission, spoke on the topic of cryptocurrencies during a recent Ecofin (Economic and financial affairs) council meeting, admitting that after debate on the topic, EU finance ministers have come to accept that cryptocurrency “is here to stay”.
Given this acceptance of cryptocurrency as a viable commodity, regulation of the currency is being attempted. However, the application of existing laws may not be appropriate for cryptocurrency, as regulations utilized on familiar commodities may be insufficient when applied to digital assets.
When reflecting on the use of cryptocurrency in ICOs (initial coin offerings, a cryptocurrency fundraising tool), Dombrovski expressed optimism. Yet when considering the entire 6 billion dollars in cryptocurrency generated in 2017, scepticism surfaced. The lack of transparency with cryptocurrency trade will inevitably result in money laundering, scams against investors and a rise in hacking, Dombrovski concluded.
The Financial Stability Board (FSB) of the G20 introduced a report that suggests measures to support stability and improvement of the financial markets, while reducing risks associated with cryptocurrency trade. And although cryptocurrency is a rapidly developing market that needs to be carefully monitored, the FSB does not currently feel that it poses an immediate threat to global financial stability.
European Supervisory Authorities and the European Commission intend to conclude by the end of 2018 “regulatory mapping of cryptographic resources” for the purpose of widening the scope of EU legislation.
Meanwhile in Europe…
Doubt persists as to how or if cryptocurrencies should be classified, even as the European Central Bank has officially categorized virtual currencies as having a “digital representation of value”. Many countries have few or no laws concerning cryptocurrency, and questions on how they can be taxed is a query that persists.