Bruegel, a European Union economic think tank, has called for general cryptocurrency regulations in the region. This call comes as finance ministers from EU member states prepare to meet in a few days’ time to deliberate on the state of the European cryptocurrency market.
Clear Rules for Cryptocurrency Exchanges and ICOs
According to Reuters, the Brussels-based Bruegel think tank believes it is the EU’s best interest to implement a standard and clear-cut set of cryptocurrency regulations. Specifically, Bruegel is concerned about protecting investors in the emerging digital asset landscape.
The call from the EU economic think tank is part of a report submitted to the region’s finance ministers in preparation for their meeting on the 7th and the 8th of September. The report also suggests the need for a robust regulatory framework for cryptocurrency exchanges and initial coin offerings (ICOs).
According to the report, the EU needs consolidated virtual currency laws to combat the spread of scams and frauds in the industry. Also, Bruegel believes that clear-cut regulations will help the region reap the immense potential of the emerging industry.
Recently, Bloomberg reported that EU finance ministers were mulling the adoption of stricter virtual currency regulations. This move comes after the EU parliament, via its Economic and Monetary Affairs Committee, recommended that the EU should not ban cryptocurrencies.
So far, the region has yet to enact comprehensive regulations. This most significant law passed by the region came earlier in the year when cryptocurrency exchange platforms operating in Europe were mandated to follow the same know-your-customer (KYC) and anti-money laundering (AML) protocols as commercial banks.
The Emergence of Cryptocurrency Hubs
With Malta, the smallest country in the EU, fast becoming a global cryptocurrency hub, stakeholders in the region could begin examining the need for more stable regulations. Otherwise, regulatory arbitrage may become a reality. If such a thing happens, businesses will then gravitate towards crypto-friendly states.
At the same time, there is a need for a nuanced approach to regulating the industry to avoid stifling the growth of the sector. Europe has traditionally been a major center for commerce and technology and would loathe having to fall significantly behind America and Asia in the global cryptocurrency/blockchain narrative.
What do you think about the Bruegel think tank’s recommendation to the EU? Keep the conversation going in the comment section below.
Images courtesy of Shutterstock.