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EU must look at regulating bitcoin says ECB

Written by Business World, on 11th Dec 2017. Posted in World

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The European Union needs to consider regulating bitcoin, European Central Bank ratesetter Ewald Nowotny said on Monday, citing the risk of money laundering.

The cryptocurrency has surged from $1,000 at the start of the year to above $16,000, and its futures jumped more than 20% to a high of $18,700 in their U.S. debut on Sunday night.

The steep gains have prompted many to question its real value and ask whether a bubble has emerged, and central bankers are worried they will be blamed if the as yet unregulated market crashes.

"Simply because of the scale, it is certainly increasingly necessary to discuss whether and in what form regulations are needed here," said Nowotny, who is also Austria's central bank governor.

"A particular aspect that needs to be discussed ...is the question of how far the regulations on money laundering ...are relevant here," he told a news conference.

While even small lenders were subject to strict controls on money laundering, it made no sense that even large bitcoin transactions could proceed without similar checks, he said, though this was a matter for the European Union rather than the ECB.

The still relatively small scale of the market in relation to traditional currencies also meant the problem was not that it threatened the current monetary system, he said.

Although there was no solid data, Austria appeared to be attracting companies selling bitcoin because it was perceived to be relatively easy to get a licence to operate there, Nowotny told reporters.

"We now have indications that we here in Austria have a more lax, a simpler regulation than in Germany... and we therefore also see a trend that such granting (of licences) is increasingly shifting to Austria. And we have absolutely no interest in that," he said.

Austria should at least match German regulations, he said, adding: "Ultimately we must settle this at the European level." (Reuters)

Source: www.businessworld.ie

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