The European Commission, the executive and legislative body of the European Union (EU), has indicated that it will try to impose rules on virtual currencies.
This comes after the European Banking Authority (EBA) prohibited European banks from buying, selling or otherwise dealing in virtual currency until regulators develop safeguards to protect their integrity. Over 70 risks were reportedly identified in virtual currencies.
Chantal Hughes, a spokeswoman for financial services commissioner Michel Barnier, said:
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“It’s imperative to move quickly on this issue. The potential for money laundering and terrorist financing is too serious to ignore.”
It will be interesting to see how institutions like Fidor Bank are affected by the developments. The bank is regulated by Germany’s financial authority. Fidor has partnered with Bitcoin businesses to facilitate transfers and trading, and recently implemented the Ripple protocol to transfer fiat at a lower cost.
The announcements come at a time where uncertainty prevailed in the EU as to its position on virtual currencies. Over the past months, several member states have approached the EU for clarification on the matter, but there has been little progress to date. The EU remains one of the last major economies yet to formalize its approach on virtual currencies.