Cryptocurrencies in Europe have never been in any serious danger. The markets are mostly left to their own devices, and each country determines what rules to impose on traders and exchanges. However, European Commission (EC) Vice President Valdis Dombrovskis has plans to discuss regulation at a roundtable event slated for next week.
“Next week, on 26 February I will chair a high level roundtable on virtual currencies. The Commission has invited key authorities, including central banks and supervisors, as well as market players to share their insights. The aim is to look at long-term trends linked to virtual currencies, and examine if current regulation is fit for purpose,” he said during the ECOFIN press conference on Tuesday.
The statement comes despite the European Central Bank (ECB) chief supervisor saying earlier this month that crypto regulation is “not exactly very high on our to-do list.”
The common European rhetoric is that rules should exist to help minimize cases of money laundering and the funding of terrorism.
The EC-hosted discussions next week might reflect this agenda, meaning that regulations will not go as far as to attempt a China-style crackdown on cryptocurrency trading.
Participants may also discuss the idea of banks entering the cryptocurrency market, and what should be done to prevent any calamities potentially triggered by this new phenomenon.
Some weeks ago, ECB president Mario Draghi said that banks may enter the cryptocurrency market using financial instruments such as Bitcoin futures, which were recently launched in the US by the CBOE and CME.
If the ECB joins the roundtable, we might have a chance to find out more about the “single supervisory mechanism” that Draghi discussed in his address to the European Parliament. It would aim to identify any risks that banks may undertake when dipping their toes in crypto waters.
It is not a given, but the fact that the EC is inviting “market players” to the roundtable might signal that Europe isn’t going to treat cryptocurrencies as harshly as other parts of the world have done so far.