5-July-14
Financial institutions across the EU should not buy, sell or hold virtual currency, banking regulators have issued a warning in the region as it tries to ensure that enterprises from the risk currencies such as Bitcoin "shield."
In a letter to MPs comments, the European Banking Authority believes that the potential benefits of this virtual currency is determined by the risk of a long list, which can only be solved entirely offset by the regulatory reform in the long run.
The European Commission said that this is a dangerous problem; "the urgent need to act quickly," given on money laundering and terrorist financing.
However, EBA report warns that such an energetic regulatory system will be expensive and cumbersome and entry into force very complex.
It contains more than 70 hazards around virtual currency, including failure to account is hacked, the counterparty to meet its payment terms, users lose their passwords, failed virtual currency exchange, as well as criminal and terrorist activities.
Regulation to address these risks need to include a full body rules for market participants to manage customer accounts on the player's virtual currency capital requirements, and the establishment of so-called "program governing authority", which is responsible for the integrity of the isolation of virtual currency, it said.
Such a system would take "quite a long time to develop, fine-tuning and implementation."
Including recommendations for action by the EBA to discourage financial institutions such as banks and other purchase from bitcoin electronic currency, and announced that it must comply with anti-money laundering and anti-terrorist financing rules virtual currency exchange "responsible entity" immediately.
The EBA said that financial institutions should continue to be allowed to maintain relationships with companies active in the field of virtual currency current accounts.
Intervention on the occasion, the state weigh the potential reaction, the rise of virtual currency and investors worry about the following faults, such as mountain GOX, possible pitfalls bitcoin exchange oldest one. China's central bank last year to prohibit financial institutions from processing virtual currency transactions.
Adam Shapiro, cape, advisers said, EBA rightly emphasizes the risk, but would prohibit banks from participating in what is potentially take away, he added:. "An important force for positive change": "The same logic can be used to pay the bank in 1995 and banned from participating in the Internet.”
Matthias Kroner, FIDOR banks in Germany, which provides virtual currency service's chief executive officer, said the government should put a positive competition Bitcoin, and the national currency like, rather than being tempted to ban them.
"Constructive" requirement would be a bonus in the sector, he said. "An unregulated market, there is no minimum standard cause dangerous environment users."
The EBA opinion, although there are some benefits of virtual currency - such as lower transaction costs, faster transaction speeds and financial inclusion - these are because of EU rules designed to speed up transactions and reduce costs "irrelevant" in Europe. "The risk, on the contrary, is multifaceted," it said.
The EBA in December issued rare warning customers to tell them in the face value of their investments and the possibility of accounts being hacked virtual currency volatility European users.
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