The European Union (EU) has released an announcement regarding economic and financial matters. According to the council, cryptocurrency is going to be a focus for the EU.
The press release, dated from 7th September, shows the comments from European Commission Vice-President (VP) Valdis Dombrovskis at the Economic and Financial Affairs Council (Ecofin) conference in Vienna. The VP stressed the need to continue to improve the resilience of the financial system. He said that this will be done as a result of putting the post-crisis financial regulatory reforms into effect, as well as working on non-performing loans.
On top of strengthening the financial ecosystem, Dombrovskis also stated:
“We also had a good exchange of views on crypto-assets. We see that crypto-assets are here to stay. Despite the recent turbulence, this market continues to grow.”
He claimed that initial coin offerings (ICOs) have a massive potential to become a feasible form of alternative financing. He stated that “last year, ICOs helped raise over 6 billion dollars in funding and this year this figure will be substantially bigger.”
Owing to this potential in innovative financial technology, Dombrovskis also pointed out that there are risks involved. The unpredictability is especially “linked to a lack of transparency”. This means that there “are risks for investment protection and market integrity, but also in the form of money laundering, potential fraud or hacking”. As a result of these risks, the EU is hoping to continue looking for developments and are doing so cooperatively with international partners at the Financial Stability Board or G20 level.
A key challenge that the EU is facing is the matter of categorizing cryptocurrency assets. The EU needs to classify them and consider the way in which the existing EU financial rules can be applied to these assets or whether new EU rules, especially for the cryptocurrencies, are needed.
For this case, the EU is working with the European SupervisoAuthoritiesies on “regulatory mapping of crypto assets”. According to Dombrovskis, there are the numerous Member States that are in support of this mapping and claims that a conclusion will be met later this year.