Fresh Round of Scrutiny Ahead? EU Ministers to Discuss Cryptocurrency Regulation

Rules vary wildly by country because of the lack of pan-European legislation.

The Eurogroup meeting in Vienna on September 7 will discuss a fresh round of regulatory scrutiny on the cryptocurrency space, according to a draft note seen by Bloomberg News.

The unaudited document states that the aim of this discussion is to look at long-term trends linked to cryptocurrencies, and examine if current regulation is fit for purpose.

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Regulation of cryptocurrencies could seek to bring them in line with EU legislation designed to combat money laundering and illegal activities, which may include requiring traders and virtual currency operators to disclose their identities.

The timing of the event is notable, given the increasingly adoption of the asset class in the United states. As Finance Magnates reported yesterday,  Cboe, the largest options and futures exchange in the US, is getting closer to launching Ethereum futures.

It also comes on the heels of discussions among different regulators about the potential need for expanded oversight of the market, though any move in that direction is not likely to happen soon.

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Rules vary but all regulators are cracking down

European leaders – including in France and Germany – have repeatedly called for more discussions on the topic. Rules vary wildly by country because of the lack of pan-European legislation. And while that may change after finance chiefs from the European Union’s 28 member states discuss digital assets next week, for the time being there’s a wide range of opinions on how best to regulate the space.

But overall, local regulators across Europe are cracking down on trading venues that lack permission to offer brokerage services. In this context, ESMA has already proposed restrictions on cryptocurrency CFDs for retail investors, including lowering the maximum leverage that companies can offer.

The European Union has previously proposed that cryptocurrency service providers be brought under the scope of its anti-money ‎laundering and countering terrorist financing regulations.‎

At the national level, the French government announced in April tax cuts on revenues generated by cryptocurrency transactions, reducing the high-band rate from ‎‎45 to 19 percent.‎

Concerns over cryptocurrency mining, trading and use in transferring money are shared by governments‏ ‏worldwide, so it makes sense to discuss the ‎speculative risks of digital assets and their impact on the ‎financial system at the continental level.‎

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