Public Hearing on Virtual Currencies: need for regulation

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On Monday 25 January a European Parliament committee held a public hearing on virtual currencies at which it discussed the possibility of regulating digital currencies. Particular emphasis was put on the need for regulation with respect to recent terrorist attacks.

The Committee on Economic and Monetary Affairs (ECON)which is responsible for economic and monetary union, the regulation of financial services, the free movement of capital and payments, taxation and competition policies and the international financial system, met in preparation for the agency’s forthcoming report on virtual currencies.

Discussed at the meeting were the risks and challenges posed by publicly traded virtual currencies, as well as the impact of Blockchain and distributed ledger technology.

The panellists included representatives from the European Commission and the Organisation for Economic Co-operation and Development (OECD) as well as representatives from the private sector.

The overriding conclusion was that the development of virtual currencies and Blockchain could be severely impeded if regulations are too onerous.

In his conclusion the German MEP Von Weizsäckerm said that regulators tended to apply “precautionary regulation”, and it was his hope that they would be able to keep an open mind in these new areas through “precautionary monitoring”. He also warned that it was important for regulators to fully understand the business model.

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