“European Union (EU) is recognizing the significance of cryptocurrencies and therefore wants to pay close attention to this market.” This is the message that European Commission Vice-President Valdis Dombrovskis sent at a meeting of Economic and Financial Affairs Council (ECOFIN). He confirmed the sentiment that crypto assets are “here to stay”. He also pointed out that European Union needs to develop means for the market regulation.
In his speech, Mr. Dombrovskis was talking about an economic state of Europe. However, he dedicated a large part of the speech to the crypto market: “We see that crypto-assets are here to stay. Despite the recent turbulence, this market continues to grow.”
Importance of Crypto Classification
European Commission will try to categorize and classify crypto assets this year. As for regulations, the Commissioner stated that they will first consider whether and how to apply existing EU financial rules. If that doesn’t work, EU will have to consider creating a new set of regulations.
It seems that EU is taking crypto related assets seriously, with a special focus on Initial Coin Offerings (ICOs). Vice-President Dombrovskis said: “they have the potential to emerge as a viable form of alternative financing”.
European Commission is aware that “ICOs helped raise over 6 billion dollars in funding”. At the same time, however, Commission sees risks because of the “lack of transparency” which creates risks for investors.
EU Is Acknowledging the Importance of Regulation of Cryptocurrencies
With a lack of efficient regulations, EU sees significant risk in the form of criminal activities. The greatest fear comes from activities such as money laundering, potential fraud, or hacking. The Commissioner, well aware that they can’t do it alone, mentioned international partners at the Financial Stability Board and G20.
It seems that EU is aware of lost time, as the Commission has already teamed up with European Supervisory Authorities. They will work on “regulatory mapping of crypto assets”, with a strong focus on regulation of cryptocurrencies.
After implementing the General Data Protection Regulation (GDPR) and finalizing EU Copyright Law, EU is turning its attention to the legislation of crypto assets.