EU Takes Serious Approach Towards Cryptocurrency Exchange Regulations

The European Union (EU) is taking a serious approach towards cryptocurrency and cryptocurrency exchange regulations. The EU is one of the most proactive governmental entities in the western world especially when it comes to tackling the issues that arise with virtual currencies.

Earlier the EU authorities had dismissed the idea of a comprehensive level of regulation. The reason behind this is that they considered the crypto sector to be relatively small and also due to the low transactions levels of Bitcoin being traded into Euros. However, the EU always shared its concern about the prevailing volatility of the market, money laundering and fraud.

The EU market presently accounts for over 30 percent of the global market in terms of projects that are being funded. A recent drive in interest amongst traders and investors in crypto exchanges based in Europe led to the same. Hence the regulators within the EU have decided to take a closer look at cryptocurrency regulations.

The European Union is planning to introduce new rules to tackle money laundering in cryptocurrency exchanges. This will automatically increase the checks on crypto exchanges. However, these procedures won’t be fully operational in all member states of the EU before 2020. Thus meanwhile, regulation is left to national authorities and the exchanges themselves, as stated in the Crowdfund Insider report.

Brussels-based think tank Bruegel believes that regulation of Bitcoin and cryptocurrency is impossible owing to their virtual nature. Hence the key is to regulate the cryptocurrency exchanges. A dominant force behind the proposed EU increase in regulations is Austria. The country has posed the question of potential risks caused by crypto assets to the EU, which need to be addressed.

According to a report prepared last month for EU finance ministers, the cryptocurrency exchanges that are seeking jurisdictions with lighter regulation may need to be tolerated for some time, in order to learn and experiment with the best approaches to the fast-developing technology. The European Union needs to adopt common rules on cryptocurrencies and scrutinize how new digital units are distributed to investors and subsequently traded, as stated in the Reuters U.K. report.

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