Finance ministers from 28 member countries in Europe will discuss putting in place further regulation on cryptocurrencies due to concerns surrounding illicit activities and a general lack of transparency. According to Bloomberg, the EU finance ministers will convene at a Vienna meeting on September the 7th in order to deliberate on whether or not to tighten regulations in an effort to curb tax evasion, terror financing, and money laundering. Regulations are usually seen as a big negative especially due to the decentralized nature of cryptocurrency but in this case, regulations could actually help growth.
The EU has previously shed a positive light on crypto, stating in a report that ICOs were an excellent funding stream for tech startups. In a general July report, the EU used the words “relatively safe, transparent and fast”. These comments are positive beyond belief if you compare with hard stances help by countries such as China who instituted a crypto blanket ban and India who have suffocating services strategy in place in order to shackle and cripple cryptocurrency adoption and growth.
The bans on crypto in some of these countries is justified as a means to curb money laundering by drug cartels through tokens such as Monero, which has been known to provide a safe haven for transacting and cleaning up Narco money. These countries have also expressed concern about the use of cryptocurrency, citing it as unsafe. This is owing to the various instances of crypto hacks and scams that have rocked exchanges such as Binance. The Bitconnect scam is also top on the list owing to the amount of money that was lost by unsuspecting investors.
Above all these concerns by countries that are jittery about cryptocurrency comes a worry by these country’s financial institutions that crypto is going to disrupt them. There is a feeling that the decentralized nature of crypto will prove too tempting to customers, causing a mass exodus of customers from traditional banking systems to digital currency systems. The EU, though kind of supportive of cryptocurrencies has been pursuing regulations. The EU reportedly though supports putting in place regulations that will help the industry grow and develop.
Though these regulations get a lot of negative press in crypto circles, they are necessary as long as cases of terrorism funding and fraud exist. If the regulations discussed by European union member states are implemented thoughtfully and carefully, it should have minimal detrimental impact on crypto.
