Fresh Round of Scrutiny Ahead? EU Ministers to Discuss Cryptocurrency Regulation

The Eurogroup meeting in Vienna on September 7 will discuss a fresh round of regulatory scrutiny on the cryptocurrency space, according to a draft note seen by Bloomberg News.

The unaudited document states that the aim of this discussion is to look at long-term trends linked to cryptocurrencies, and examine if current regulation is fit for purpose.

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Regulation of cryptocurrencies could seek to bring them in line with EU legislation designed to combat money laundering and illegal activities, which may include forcing traders and operators of virtual currencies to disclose their identities.

The timing of the event is a notable one, given the increasingly adoption of the asset class in the United states. As Finance Magnates reported yesterday,  Cboe, the largest options and futures exchange in the U.S., is getting closer to launch Ether futures.

It also comes on the heels of discussions among different regulators about the potential need for expanded oversight of the market, though any move in that direction is not likely to happen soon.

Rules vary but all regulators are cracking down

European leaders – including France and Germany – have repeatedly called for more discussions around the topic. However, the rules vary wildly by country, given a lack of pan-European coordination among authorities. And while that may change after finance chiefs from the European Union’s 28 member states discuss digital assets next week, for the time being there’s a wide range of opinions on how best to regulate the space.

But overall, local regulators across Europe are cracking down on trading venues that lack permission to offer brokerage services. In this context, the ESMA has already proposed restrictions on cryptocurrency CFDs for retail investors, including lowering the max allowed leverage.

The European Union has previously proposed to bring providers of ‎financial services related to cryptocurrencies under the scope of its anti-money ‎laundering and countering terrorist financing regulations.‎

At the national level, the French government announced in April tax cuts on revenues generated by cryptocurrency transactions, and reduced the high-band rate from ‎‎45 percent to 19 percent.‎

The concerns over cryptocurrency mining, trading and usage to transfer money are already shared by several ‎governments‏ ‏across the globe, so it makes sense to discuss the ‎speculative risks of such digital assets and their impact on the ‎financial system at continental level.‎