Call For EU To Draw Up New Bitcoin Regulation
Addressing regulatory concerns in regard to Bitcoin is proving to be quite a task, with nations eager to not repress innovation while also preventing financial malpractice and warning about investor risk.
European Commission Vice-President Valdis Dombrovskis has written a letter to the heads of financial regulation, responsible to the EU, urging for updated regulatory action specifically in regards to Bitcoin.
In the letter, Dombrovskis writes:
The developments relating to bitcoin and crypto-currencies in recent weeks require our heightened attention as a matter of urgency … in light of the recent market developments.
Recent market developments saw Bitcoin’s price quickly rise from $14,000 to $20,000, although it is unclear why this increase should now make Bitcoin suddenly more relevant to regulators, the ability to further regulate and grant necessary applicable licenses would appear to be being called for with an increased urgency.
Addressing Investor Risk, Market Manipulation, and Fraud
The letter continues, highlighting investor risk as well as market manipulation concerns:
(Regulators should undergo) further work to assess and potentially improve the applicability of our regulatory framework to bitcoin and crypto-currencies. There are clear risks for investors and consumers associated to price volatility – including the risk of a complete loss of investment, operational and security failures, market manipulation, and liability gaps.
Investor risk was a prime factor in China’s recent crackdown on cryptocurrencies, exchanges and ICO’s, although they are no doubt also aware of market manipulation and potential security failures too. Terrorist funding and capital flight are also prime concerns driving potential future action.
Japan issues specific licenses for businesses to operate under, and whilst funding may be small outside of tradition finance, the Fintech industry is an area which nations are keen to not stifle or to be left behind on.
How do you feel world governments are handling the impact of Bitcoin? Are national security concerns enough to warrant urgent action? Let us know what you think in the comments below.
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