Think tank advises EU to take unified regulatory approach
Reuters has seen a report from a Belgian think tank that advises European Union authorities to take a unified regulatory approach to cryptocurrencies, with extra scrutiny on initial coin offerings (ICOs).
The report from Bruegel, Reuters says, is expected to be distributed to EU economic and financial affairs ministers at a meeting on digital investments and taxation of the digital economy in Austria on 7-8 September.
It urges the EU to adopt a common set of rules, and the regulation of crypto exchanges and ICOs at the EU level to help manage associated risks and harness the potential of blockchain technology.
Bruegel compares the global regulatory landscape, which varies to great degrees – from overall trading bans in China, to the light-touch approach of countries such as Malta and Switzerland’s Zug province.
It recognises the scope for regulatory arbitrage given these differences and that regulators should tolerate crypto exchanges that move in order to seek jurisdictions with more laissez faire regulations.
“There is a need to experiment and learn about the best approaches to this fast-developing technology,” the report says.
Weekend EU meeting
European ministers are expected at this weekend’s meeting to discuss the challenges posed to regulators and lawmakers by the growth of the digital asset sector.
EU authorities have, so far, held back from issuing a comprehensive set of rules governing the digital asset market – seeing little systemic threat from the sector due to its relatively small size.
But increasing criminal activity in terms of fraud, money laundering and tax evasion has put pressure on regulators to act.
Bruegel advises stricter disclosure rules for exchanges and tighter monitoring of the ICO market to protect investors from fraud and scams.