(Bloomberg) -- The European Union is hedging its bets on financial technologies such as cryptocurrencies and initial coin offerings that some see as leaving the door open to fraud, money laundering and the like.
As part of plans to regulate FinTech, the European Commission intends to “assess the applicability” of the EU's regulatory framework to cryptocurrencies and ICOs, according to a document seen by Bloomberg. The commission, the bloc's executive arm, also will organize a roundtable in the second quarter to discuss “challenges and opportunities” that it will report on later in the year, according to the document.
“There are already more than 1,500 virtual currencies and new ones appear every day,” said Markus Ferber, a member of the European Parliament. “Nevertheless, from a regulatory point of view they are still the wild west. That's why Bitcoin and co. need to be classified as financial instruments. On that, the commission has to deliver.”
The commission declined to comment.
The excitement around cryptocurrencies -- derided by Nouriel Roubini, chief of Roubini Macro Associates, as “the biggest bubble in human history -- is abating as regulators crack down and their cash value plunges. European authorities including the European Central Bank and the European Securities Markets Authority have joined the chorus of warnings about the speculative environment for cryptocurrencies and ICOs and their potential for loss.
Value Transfer
“An assessment of the regulatory framework may be necessary for this new and fast developing means of value transfer, capital raising and investment,” according to the commission document. “While continuing to monitor cryptocurrency developments carefully, the commission will exchange views with supervisors, regulators and the industry to assess any further course of action.”
At the same time, the commission wants to bring in a regulatory framework that will foster the development of FinTech. The aim would be to create an “environment where innovative FinTech products and solutions can be rapidly rolled out across the EU to benefit from the scale economies of the single market,” including the benefits of passporting, it said.
Noting that in the absence of EU-wide rules 11 member states have brought in regimes governing crowdfunding and similar activities, the commission wants to identify existing divergent licensing requirements to decide whether an EU framework or guidance for national supervisors would be needed.
To contact the reporters on this story: John Glover in London at johnglover@bloomberg.net, Alexander Weber in Brussels at aweber45@bloomberg.net.
To contact the editors responsible for this story: Patrick Henry at phenry8@bloomberg.net, Jones Hayden
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