Regulators say new EU cryptoasset rules may be needed
Almaty. January 10. KazTAG - New European Union rules may be needed to better protect consumers from cryptoasset risks, prevent money laundering and stop diverging national regulations from creating unfair competition, EU regulators said on Wednesday, reports Reuters.
Regulators have warned investors since 2013 they could lose their shirts by investing in virtual currencies such as Bitcoin and ether, or in initial coin offerings (ICOs) that raise money for companies in return for tokens.
Bitcoin rocketed close to $20,000 in late 2017, sweeping up investors from across the world, but it has since lost three-quarters of its value.
The value of cryptoassets globally peaked at $830 billion a year ago, but fell to $210 billion by October, equivalent to less than 3 percent of the gold market.
The European Banking Authority (EBA) said in a report on cryptoassets that they typically fall outside the scope of EU financial rules, making it harder to build a detailed picture.
EU regulators have identified financial institutions owning cryptoassets directly, making a market in them, lending against cryptoasset collateral, and exchanging cryptoassets for cash, but have little data on these activities.
Market developments also point to the need for a further review of EU anti-money laundering legislation, the EBA said.
A comprehensive cost-benefit analysis would determine what, if any, action is required to regulate “opportunities and risks” from cryptoasset activities and related technologies, EBA said.
The watchdog said a broad approach should be taken, including how high amounts of energy used to mint cryptoassets impact EU climate change and sustainable development goals.
An EU analysis could assess the impact of cryptoasset activities on financial sector resilience, and the links between cryptoassets and traditional banking.
“Given the pace and complexity of change, it would be desirable for a technologically neutral and future-proof approach to be adopted in developing any proposals should it be concluded that EU-level action is needed,” EBA said.
Photo source: picture from an open source