EU mulls tightening of rules around cryptocurrency

30 Aug 18

The European Union is considering tightening up regulations around cryptocurrencies such as Bitcoin, Ripple and Ether, it has been reported.

EU economy and finance ministers are set to meet informally in Vienna next week where they are expected to discuss the challenges thrown up by digital assets, according to Bloomberg.

There are concerns that cryptocurrencies lack transparency and are being exploited as a means of tax evasion, terrorist financing and money laundering.

Latest EU money laundering regulations, which came into force in July, provide a framework with which to regulate digital currencies.

The rules mandate greater transparency by limiting the use of anonymous payments through pre-paid cards, “including virtual currency exchange platforms”.

Three EU financial watchdogs warned in February about the high risks of buying and holding virtual currencies.

“[Virtual currencies] currently available are a digital representation of value that is neither issued nor guaranteed by a central bank or public authority and does not have the legal status of currency or money,” a note issued by the European Securities and Markets Authority, the European Banking Authority and the European Insurance and Occupational Pensions Authority stated.

“They are highly risky, generally not backed by any tangible assets and unregulated under EU law, and do not, therefore, offer any legal protection to consumers.”

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