Back in December the European Banking Authority (EBA) issued a warning to consumers on virtual currency.
Then in July the EBA issued an opinion on virtual currencies.
The best known Virtual Currency (although not named by the EBA) is Bitcoin.
The European Banking Authority, the EBA, has called on national supervisory authorities to discourage banks and credit institutions from buying, holding or selling virtual currencies. It calls for regulation of market participants at the interface between conventional and virtual currencies. Over the longer-term, the EBA is calling for a ‘substantial body’ of regulation to be applied to virtual currency market participants, including the creation of ‘scheme governing authorities’ accountable for the integrity of a virtual currency scheme and the imposition of capital requirements. In the short term, the EBA is calling for national authorities to ‘shield regulated financial services from virtual currencies’.
So do you think Virtual Currencies are useful and worthwhile?
steve@bicknells.net
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Interesting post Steve. I think the EBA will have a real job on their hands trying to apply traditional instruments of financial regulation to bitcoin. It hasn’t worked out too well for the BitLicense which was recently drafted in NewYork (currently in consultation). The regulations are so over-reaching that it is almost impossible to comply with. Most major market participants have arranged themselves outside of NY or have declared that they may block NY citizens from using their services if the regulations are enacted.
I’m sure the EBA will try damn hard to stifle Bitcoin and other digital currencies as much as they can, they have a vested interested to do so. If the technology proves to delivery significant utility over traditional banking then it will inevitably prevail in the end.