Europe wants to regulate bitcoin to clamp down on illegality
European governments are pushing for bitcoin regulation amid mounting alarm that the world’s most popular digital currency is being used by money-launderers, drug traffickers and terrorists, Bloomberg reported.
French Finance Minister Bruno Le Maire said he’ll ask his counterparts in the Group of 20 nations to consider joint regulation of bitcoin. His concerns are shared by the Italian government, which would be open to discussing regulation, according to a government official in Rome who asked not to named since the move is not yet policy. The European Union is also bringing in new rules that would apply to bitcoin.
“I don’t like it; it can hide activities such as drug trafficking and terrorism,” Le Maire said on LCI television, adding that he also had concerns for savers. “There is an obvious speculative risk, we need to look at it, study it,” he said.
Le Maire’s proposal came as bitcoin took another step toward acceptability with the launch of futures trading Sunday night at CME Group Inc.’s venue. That’s a week after Chicago rival Cboe Global Markets Inc. introduced similar derivatives on the volatile cryptocurrency that was created in the wake of the 2008 financial crisis as an alternative to banks and government-issued currencies. Bitcoin was closing in on a fresh record $20,000 on Monday.
France is not alone in seeking to regulate a currency which is stepping further into the mainstream financial world. Italian Finance Minister Pier Carlo Padoan would be ready to discuss Le Maire’s proposal, according to the official in Rome, who said that the ministry had yet to receive any request from Paris.
EU lawmakers and representatives of the member states agreed on a revision of the bloc’s anti-money laundering rules Friday, extending the framework to firms that “are in charge of holding, storing and transferring virtual currencies,” according to a statement from the European Commission. These companies “will have to identify their customers and report any suspicious activity.”
Stephen Barclay, Economic Secretary to the British Treasury, told lawmakers on Nov. 3 that new rules would “bring virtual currency exchange platforms and custodian wallet providers into anti-money laundering and counter-terrorist financing regulation.”
For the British government, digital currencies “can be used to enable and facilitate cybercrime,” according to a note from the Treasury. “There is little current evidence of them being used to launder money, though this risk is expected to grow,” the Treasury said. “That is why these regulations will help.”
In Berlin, a Finance Ministry spokesman said it was watching “bitcoin and other cryptocurrency developments closely,” adding that Germany’s financial supervisor Bafin has already warned of the risks of cryptocurrencies for consumers.
Elisabeth Roegele, Bafin’s Chief Executive Director of Securities Supervision, said in a Nov. 30 speech in Frankfurt that regulation at a purely national level was not enough because of digital currencies’ international dimension. “The Internet in particular does not know national borders,” Roegele said.
Two Nobel economics laureates denounced Bitcoin last month. Joseph Stiglitz said it should be outlawed, and doesn’t serve “any socially-useful function.” Robert J. Shiller said the attraction of the currency was a narrative akin to a “mystery movie” that draws in people who want to outsmart the system.