“We want Europe to embrace the opportunities of blockchain, the technology underlying cryptocurrencies. But to do so, we must be vigilant and prevent cryptocurrencies from becoming a token for unlawful behavior.”
These comments came from Valdis Dombrovskis, Vice President of Europe’s Economic and Financial Affairs Council (Ecofin), while speaking at a press conference in Belgium.
Dombrovskis had been addressing a few points of concern that Ecofin currently wants to bring to the table for discussion, one critical topic of concern seems to be the advent of cryptocurrencies and the effect they’ve had on the world in general.
Dombrovskis mentioned that a few suggestions had been made on EU’s treatment of cryptocurrencies in the past, some of which, still need to be discussed in a detailed manner. He further stated that he had directed European Supervisory Authorities to update their warnings with cryptocurrencies, something that will be followed up and will result in tangible actions shortly.
He also referred to the updated set of regulations that were passed last month by the European Union (EU) legislators, which were focused on eliminating anonymous transactions that cryptocurrency traders have been able to maintain so far.
The new regulations require cryptocurrency exchanges to put know your customer (KYC) measures into effect to end anonymous transactions. This move had been taken so the relevant authorities could have all vital information on hand in case of any suspicious activity.
Speaking further on these regulations, Dombrovskis mentioned that they would result in “less anonymity and more traceability.”
As the passed regulations need to be formally adopted by European legislators within 18 months to go into effect, Dombrovskis urged the relevant personnel to “transpose the new rules” as soon as possible.
He also mentioned that the far-reaching implications of cryptocurrencies have the potential for “ramifications” on various institutions and areas, which also includes central banks of member nations.
“That’s why I intend to bring together key authorities and the private sector in a high level roundtable very shortly to assess the longer term situation beyond the current market trends.”
Possible effects that this could have on cryptocurrencies
The intention from Dombrovskis to bring authorities together for a detailed discussion comes in the midst of global calls for regulations on cryptocurrencies. For instance, France is supposed to bring up this topic during the G20 Summit in Argentina this year.
Furthermore, while some countries like South Korea have been reasonable in regulating cryptocurrencies, others have taken a more stern approach towards the regulatory procedure.
However, with the growing reach of cryptocurrencies and the possibility of them growing into something more than digital tokens of niche, peer-to-peer transactions, calls for regulations are inevitable even if not justifiable in some cases.
Keeping all of this in mind, it will not be a surprise if the next major Ecofin meeting does discuss cryptocurrencies extensively.
What is Ecofin?
Ecofin is Europe’s council of member nations’ economics and finance ministers. It also involves European Commissioners as per their relevance.
In addition to preparing the EU budget, the council takes care of important EU policies pertaining to matters such as Euro’s legal aspects, as well as EU economics, taxation, financial markets and economic relations with non-EU nations.