Bitcoin 'not seen as a currency for transactions' says expert
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Companies that transfer bitcoin or other crypto assets must collect details of senders and recipients to help authorities crack down on dirty money, EU policymakers said on Tuesday in the latest efforts to impose regulation on the sector. The law proposed by the European Commission would apply what is known as the travel rule to crypto transactions to make them traceable. The rule, which is one of the recommendations of the inter-governmental watchdog, the Financial Action Task Force (FATF), already applies to wire transfers.
The Commission said in a statement: “Today’s amendments will ensure full traceability of crypto-asset transfers, such as bitcoin, and will allow for prevention and detection of their possible use for money laundering or terrorism financing.”
It is no secret that EU institutions are not fans of cryptocurrencies.
Earlier this year, one of the European Central Bank (ECB)’s executive board members, Frank Elderson wrote on Twitter: “Crypto-assets are volatile.
“They lack any intrinsic value and there is no reliable institution backing them.”
Moreover, at the beginning of January, the President of the ECB, Christine Lagarde, said “there has to be regulation” when it comes to bitcoin.
In a recent report, though, the head of Oxford-based think-tank Euro Intelligence Wolfgang Munchau explained why the EU’s war on bitcoin is going to miserably fail.
He wrote: “You can always tell hypocrisy when somebody predicts that a certain event won’t happen, and then calls for rule changes to make sure it won’t happen. For example, you forecast that inflation won’t be a problem, and then you call for an overshooting inflation target.
“The same goes for the crypto-debate in Europe: if you think that bitcoin is a bubble that will eventually burst, why worry?”
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Mr Munchau added: “Yesterday the European Commission proposed that Europe should follow the lead of Vladimir Putin and regulate crypto – as part of its new anti money-laundering rules.
“What this is telling us is that they are worried.
“What we are certain of is that they can’t conceivably succeed.”
According to the political commentator all that will happen is that people use off-shore wallets not subject to EU regulations.
He concluded: “The EU cannot stop anonymous internet transactions – just as the Russians can’t.
“The Commission is, however, aware that there is a great danger of driving the market underground. It said that in order to balance the risks, the new rules would be limited only to transactions for €1000 (£861.29) and over, with a number of stated exemptions in both directions.
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“The crypto regulation reminds us of a debate in the German Bundestag in the early Nineties, when MPs thought they could curtail email in order to save what they thought was a well functioning telegraph network. We wish the European Commission good luck.”
Earlier this year, William Mougayar, an entrepreneur, investor, blockchain researcher and advisor claimed the European Central Bank’s position was an “ultimate display of misunderstanding cryptocurrencies potential.”
He wrote on Twitter: “bitcoin and cryptocurrencies are already regulated by proxy.
“[Anti-money laundering] applies to everything, and while many financial instruments are speculative, none are more transformative than cryptocurrencies.”
One of his followers replied: “They understand cryptocurrencies absolutely.
“They just fear it because they can’t put the money in their own pocket like taxes or other donations.”
Express.co.uk does not give financial advice. The journalists who worked on this article do not own bitcoin.
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