EU Looking To Monitor And Not Regulate Virtual Currencies
The volatile world of digital or virtual currencies like bitcoin have been the subject of much controversy in the last few years. As a whole the concept of cryptocurrencies is still largely misunderstood by a lot of governments who have yet to adopt a clear policy as to implementing safeguards and regulations to protect consumers.
The much publicized collapse of one of the world’s largest bitcoin exchanges Mt. Gox a few year ago showcased the volatility that this industry has become synonymous with. In a statement today The European Union says they would adopt a policy of monitoring and not regulating virtual currencies for now as they still only amount to a fraction of what the global foreign exchange markets generate. It is estimated that bitcoin accounts for 90% of virtual currency transactions which are estimated to be around $7 billion annually. This is a fraction of the estimated $5 trillion of global foreign exchange markets.
Currently there are over 600 digital currencies and concerns of money laundering and funding terrorism are always been linked to virtual currencies as they are not controlled by a central body but rather in the anonymous online world.
Financial services official for the EU’s European Commission, Olivier Salles re-iterated their cautions approach to rush in and regulate without learning more about the sector. He said,” It’s easy to fail when you regulate, you can be too early and too late. From the European Commission’s perspective, we are more on the monitoring side. We want to understand better what is happening.”