While the European Banking Authority has created a “roadmap” on how to regulate emerging FinTech services, the body is not keen on creating a unified approach to cryptocurrency regulation — at least not yet, Reuters reported.
As new European Union rules are making it easier for startups to roll out services, such as payments, European Banking Authority Head Andrea Enria said his organization would look into the services provided by FinTech firms, “with a view to ensuring that similar services, entailing comparable risks, are regulated in a consistent way across the EU,” he said.
FinTech hasn’t been subjected to comprehensive rules in Europe, as regulators believe the segment is small compared to traditional banks, while politicians don’t want to hold back innovation, as major European cities seek to attract FinTech firms.
Still, “we need to ensure that firms can enter and participate in the internal market for financial services on an equal footing and that a high standard of consumer protection is maintained,” Enria said. But when it comes to cryptocurrencies, Enria is “yet to be convinced” that crypto should fall under comprehensive regulation. He recommends a strategy of focusing on anti-money laundering and terrorist financing rules instead — at least in the short term.
The comments come as the European Union (EU) has said it’s willing to step in and regulate cryptocurrencies if the risks associated with digital tokens aren’t addressed. According to a report in Reuters, citing officials from the European Union, the wild price movements of bitcoin last year and into 2018 has resulted in huge losses for some and big gains for others.
“This is a global phenomenon, and it’s important there is an international follow-up at the global level,” European Commission VP Valdis Dombrovskis told reporters. “We do not exclude the possibility to move ahead (by regulating cryptocurrencies) at the EU level if we see, for example, risks emerging but no clear international response emerging.”
Reuters noted earlier in February that both Germany and France believe cryptocurrencies offer new opportunities as well as the potential for big risks to investors. The countries also said digital tokens could be vulnerable to manipulation by criminals if safeguards aren’t introduced.