A think tank report prepared for EU finance ministers is urging the European Union to adopt common rules on cryptocurrency and scrutinize how digital coins are distributed and traded among investors.
Bruegel, the Brussels-based think tank which specializes in economics and aims to “improve the quality of economic policy with open and fact-based research,” says there needs to be clearer rules on Initial Coin Offerings (ICO) and regulation of cryptocurrency exchanges throughout the EU to optimize the potential of the crypto market.
So far, the European Union has fallen short of adopting common rules on cryptocurrency and averted comprehensive regulation due to the relatively small size of the industry and that trading of bitcoin into euros is low. The EU has, however, long been concerned with the risk of fraud within the highly volatile cryptocurrency market.
Europe open to cryptocurrency ventures
The European Union can no longer ignore the growing presence of cryptocurrency startups within Europe. The notably more generous tax regulations than the likes of Japan, the United States and China, means that many cryptopreneurs are heading to European countries to set up thriving ventures.
With the crypto market expanding across the continent, EU regulators are being forced to take a closer look at the rules surrounding digital units and blockchain technology.
According to Bruegel, due to their virtual nature, the regulation of bitcoin is virtually impossible. By contrast, the entities involved with bitcoin and other digital currencies, such as the exchanges, could be subjected to tighter control.
Bruegel’s report is realistic about the timescales for implementing common rules on cryptocurrency within the EU, admitting that exchanges looking to Europe for less regulation may need to be tolerated for some time to “experiment and learn about the best approaches to this fast-developing technology.”
Blockchain regulation a barrier to widespread adoption
The think tank’s recommendations come in the wake of a warning that blockchain regulation is the biggest barrier to the full-scale deployment of blockchain solutions in business.
A recent survey by PricewaterhouseCoopers found that blockchain technology regulation needs to be overcome before the technology can enjoy widespread acceptance.
Gabrielle Pickard-Whitehead is a freelance journalist and copywriter based in the Peak District, UK. Since 2006, Gabrielle has followed her passion for writing and has sculptured a rewarding career out of her love for the written word. Gabrielle thrives on creating compelling content related to current affairs, politics, financial news and the latest advancements in technology and innovation. Gabrielle is excited about having the chance to write about the constantly-evolving world of crytocurrency and enabling people to learn more about this rapidly-advancing digital asset.