European Commission Vice-President Valdis Dombrovskis hinted in comments Monday that the European Union should consider moving forward with regulating cryptocurrencies and not wait for global agreement on how to proceed.
“This is a global phenomenon and it’s important there is an international follow-up at the global level,” he said.
“We do not exclude the possibility to move ahead (by regulating crypto-currencies) at the EU level if we see, for example, risks emerging but no clear international response emerging.”
The Commission is the executive arm of the European Union.
Dombrovskis was speaking after a European Commission roundtable meeting on cryptocurrencies attended by representatives from the European Central Bank, the Financial Stability Board, the European Parliament’s monetary affairs committee and other regulatory and industry bodies.
An influential German politician, Markus Ferber, vice-chair of the monetary affairs committee, was even more forthright, saying that unregulated crypto meant retail investors were exposed to “manipulation and fraud”.
He also joined the calls for the EU to adopt regulations quickly, without waiting for global partners.
In a published statement Ferber said: “When it comes to virtual currencies, we need a quick EU-wide regulatory response. If we wait until international standards trickle through to the EU, years will pass without anything happening.”
He continued: “Right now, retail investors are losing money as they are not aware of the dangers of virtual currencies. In order to make sure that retail investors do not fall prey to market manipulation and fraud, virtual currencies should be regulated as other financial instruments.”
Earlier in February, European financial regulators in the form of the European Banking Authority, European Securities and Markets Authority and European Insurance and Occupational Pensions Authority, highlighted the dangers to financial stability posed by cryptocurrencies because of their volatility and the current lack of legal protection for market participants.
In November last year the economic secretary to the UK Treasury, Stephen Barclay, said in a written reply to a parliamentary question that the EU was expected to finish working on its regulatory response to cryptocurrencies, but no proposals have yet been brought forward.
The crypto market has not reacted negatively to the latest statements from EU officials. Prices, for now, are continuing to head north, with bitcoin trading at $10,781, according to coinmarketcap.com, helping to pull most other top-tier coins higher in its wake.
