Crypto Should Be Regulated by Common EU Policy, Special Report Urges Member-States

A Pan-EU approach that targets virtual coin trading platforms and Initial Coin Offerings (ICOs) is required, the Bruegel think-tank said in a new analysis written for this week’s meeting of European Union (EU) finance ministers.

The EU should regulate cryptocurrency market with a unified policy approach, Bruegel NGO has urged in a new analysis, according to a Reuters report on Wednesday.

EU should enact a common policy that targets entities dealing with these assets such as exchanges, Bruegel said in the report, as the regulation of cryptocurrencies like Bitcoin (BTC) is nearly impossible due to the decentralized nature of virtual coins. The Brussels-based economic NGO also urged for a pan-EU approach towards the Initial Coin Offerings (ICOs), the crypto crowdfunding model that has become very popular in recent months. The EU accounts for about 30% of the ICO global market.

The think-tank recommended a ban on the process of ‘creating’ digital coins, or cryptocurrency mining.

“As done in China, mining farms can be forbidden,” Bruegel said as quoted by Reuters.

The EU finance ministers will have a summit in Vienna this Friday and Saturday with virtual coins already revealed as one of the agenda’s topics. Austria, which is the current EU Presidency-holder, wants to discuss whether the bloc should introduce a unified policy for addressing the risks and potential related to crypto assets.

EU and the crypto world

At the moment, the EU does not have a common approach regarding cryptocurrency, but the Union has taken several limited steps in introducing rules for the virtual coin industry. The fifth revision of the EU Anti-Money Laundering Directive (AMLD), adopted earlier this year, put in force AML rules for virtual exchanges that offer crypto-to-fiat trading. These anti-money laundering measures, mainly due diligence, do not cover crypto-to-crypto trading operators.

Virtual coin companies, operating in the Union, are also subject to further AMLD provisions, mainly related to ownership transparency. The Directive enables EU citizens to access beneficial ownership registers without having a ‘legitimate interest’ in the information.

Last month, the European Securities and Market Authority (ESMA) enforced a 2:1 limit on cryptocurrency contracts for difference (CFDs). The measure will last three months with a possible renewal in November.