the European Union has claimed to be ready to regulate cryptocurrencies, in can the risks associated with it are not tackled at the global.
there has been a global investment craze over bitcoin, and other virtual currencies in the last year. And we have seen wild variations in their valuations, making fortunes for some investors while others have lost heavily.
“This is a global phenomenon and it’s important there is an international follow-up at the global level,” Valdis Dombrovskis told reporters. Adding that “We do not exclude the possibility to move ahead (by regulating crypto-currencies) at the EU level if we see, for example, risks emerging but no clear international response emerging.”
G20 finance ministers and central bankers meet in Buenos Aires in March, with crypto-currencies set to be on the agenda. The EU will decide how to address the issue later this year or early in 2019.
Germany and France have also been vary of cryptocurrencies, saying that while new opportunities arose from crypto-currencies, they could also pose a substantial risk for investors. The possibility fo financial crime is higher with the current lack of safeguards.
As of yet, there appears to be no strong consensus among G20 countries to regulate cryptocurrency closely.
Policymakers worry about losing jobs and growth to other regions if they crack down hard on innovation in the sector, especially stemming from the blockchain technology that underpins crypto-currencies, which Dombrovskis said holds strong promise.
“In order to make sure that retail investors do not fall prey to market manipulation and fraud, virtual currencies should be regulated as other financial instruments,” Ferber said in a statement.