Shortly after the meeting of the European Union Economic and Financial Affairs Council (ECOFIN) in Vienna had concluded, on September 7 2018, the European Commission Vice-President Vladis Dombrovskis stated the council’s thoughts on virtual currencies despite the turbulence its market is facing is that it is here to stay.
Prior, there were speculations that the 28 EU finance ministers would converge in a meeting to discuss the future of regulation as regards the emerging cryptocurrencies sector.
Crypto Grows Amidst Turbulence
Vice-President Vladis Dombrovskis further stated in his opening speech that the council has been able to develop a broad-based optimism in the cryptocurrency sector including Initial Coin Offerings (ICO).
The council has also made a reference to the growth of the cryptocurrency sector despite turbulence, asserting that no test can be higher than this to prove the viability of the industry. He expressly stated that;
“We see that crypto-assets are here to stay. Despite the recent turbulence, this market continues to grow. In particular initial coin offerings … have the potential to emerge as a viable form of alternative financing.”
Judging by the recent trend, it is safe to conclude that the Vice President, who is in charge of Financial Stability, Financial Services and Capital Markets Union in the EU, is not only an enthusiast but also an adherent advocate championing the course of developing a uniform regulatory framework for crypto use in Europe.
The EU and Crypto Regulations
The EU has been working on cryptocurrency regulations for a while without an actual concrete convention. In December last year, Vladis Dombrovskis reportedly wrote a letter to the three major agencies namely; the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA) on this same subject matter, emphasizing the need to warn bitcoin adopters of the inherent risk in cryptocurrencies-related investments.
On Friday 7th September 2018, the Vice-president further expressed his concern as he has done in time past about cryptocurrencies as regards various general risks for investment protection and market security couple with other advanced risks such as money laundering, hacking, potential fraud, and blackmail.
According to him, the above-stated reasons are enough grounds for the European Union to conclude with its regulatory frameworks and focus on monitoring the development of the cryptocurrencies ecosystem in partnership with the Financial Stability Board and the G20. Vladis Dombrovskis further stated that the European Union had expanded the scope of existing Anti- Money Laundering (AML) and Anti- Terrorism financing regulations to accommodate the crypto wallet providers and the Virtual currencies Exchanges as well. He further explained, stating that:
“Many Member States today supported the need for such mapping, so we expect to conclude this assessment later this year. This will provide a solid ground to build on and to decide on further steps in this area.”