The European Union should adopt common rules on cryptocurrencies and scrutinize how new digital units are distributed to investors and subsequently traded, according to a report prepared for EU finance ministers.
The Brussels-based think tank Bruegel argues for EU-level regulation of crypto exchanges and clearer rules on “Initial Coin Offerings” (ICOs) to control risks and exploit the potential of the industry and its underlying Blockchain technology.
The document, seen by Reuters, is due to be presented to the ministers who are meeting on Friday and Saturday in Vienna.
So far EU authorities have avoided comprehensive regulation because of the sector’s relatively small size and the low percentage of trade in bitcoin, the most popular cryptocurrency, into euros. However, they have long worried about the market’s high volatility and the risk of fraud and money laundering.
Now the possible expansion of the crypto exchange business in Europe and considerable interest in ICOs in EU countries, which account for 30 percent of the global market in terms of projects funded, is pushing regulators to take a closer look.
Hong Kong-based Binance, one of the world’s largest crypto exchanges, plans to move to Malta, the EU’s smallest state, after a Chinese crackdown on the industry.
Austria, which holds the rotating EU presidency, is asking whether EU regulations need changing to address “potential risks posed by crypto assets” and harness their full potential, according to a preparatory document for the meeting of finance ministers. (via Reuters)