Will Bitcoin Prices Be Affected By Tighter EU Regulations?
The European Union (EU) member states are taking a close look at cryptocurrencies and are on the verge of deciding on new regulations for the industry.
The decision is mainly whether to go for tighter regulations and to look at issues like transparency and money laundering.
The EU plan is to meet on September 7 to make a decision on these and other cryptocurrency-related issues.
This meeting will have all the finance ministers in the EU discussing the cryptocurrency market. The main focus is on whether to place stricter regulations on the market. Concerns about transparency and its use for illegal activities have made cryptocurrencies a hot-button issue.
Another point of concern for EU regulators is the fact that the market is very volatile. Cryptocurrencies can gain and lose a lot in a single day of trading. Gains are no problem, but regulators want to implement protections for investors so that they don't lose a lot of money. EU crypto companies and traders will not be too concerned with the meeting. Cryptocurrencies are sure not to be banned since the EU Parliament's Economic and Monetary Affairs Committee advised against the banning of cryptocurrencies. The committee felt that cryptocurrencies provided a way to make global commerce easier. Additionally, many European regulators feel that initial coin offerings (ICOs) are an excellent way to raise capital funding.
Potential tighter regulations may cause bitcoin prices to take a hit, which can be tough on the world’s most popular cryptocurrency which has witnessed massive decline in value in 2018.
Different regulators across the world have been adopting varying approaches in regulating cryptocurrencies. For example, China has been hard at work at stopping cryptocurrency from entering the country. Other countries have more reasonable approaches to their cryptocurrency regulations.
The US is sending mixed signals on the cryptocurrency market, with most of the time the approach being more open to cryptocurrencies. Japan is taking a similar tack, regulating cryptocurrency exchanges to better protect investors.
The EU already has already enforced some pretty tough regulations on the cryptocurrency industry. Earlier in the year, the EU required that all cryptocurrency exchanges operating in the region to comply with know-your-customer and anti-money laundering laws. This has been a great help in reducing illegal activities associated with cryptocurrencies.
Besides cryptocurrencies, the blockchain technology behind it is of interest to the EU. As many as 22 EU countries signed a memorandum of understanding about blockchain partnerships in April 2018. The goal was to set in place procedures to enable blockchain cooperation among EU countries and to ensure that the EU has a solid presence in the market.
Petar has spent the last few years following rise of cyptocurrencies, lending insights to the potential icos coming to market as well as how current currencies are operating. Petar background is in the finance sector and is a banker by trader so money is always on the mind.