Calls to enforce clear and uniform guidelines for crypto across European Union (EU) member states are to be made before EU finance ministers this week, Reuters reports September 5.
Brussels-based think tank Bruegel is said to have prepared a new report devoted to the crypto industry for EU finance ministers, who are due to meet this Friday and Saturday in Vienna, Austria. The report is said to reserve particular scrutiny for initial coin offerings (ICOs) as well as for crypto exchanges, the latter of whose presence in the EU is set to increase this year.
As the Bruegel document reportedly itself highlights, Hong Kong-based Binance has recently been working on relocating its headquarters to Malta in the wake of industry crackdowns across Asia. Beijing-born crypto exchange Huobi, as Cointelegraph has reported, is also eyeing its entry into the EU market.
The think tank has reportedly claimed that while new EU rules on money laundering will eventually tighten checks on crypto exchanges by 2020, regulatory oversight is in practical terms largely left to national authorities.
This fact, as per Bruegel, “might suggest that there is scope for regulatory arbitrage,” which the think tank notes might be tolerated in order to temporarily foster opportunities for all parties “to experiment and learn about the best approaches to this fast-developing technology”.
Bruegel reportedly notes that being “virtual,” assets such as Bitcoin (BTC) pose intrinsic challenges to regulators on spot markets. Nonetheless, entities that oversee their production, exchange, and trading via related speculative instruments could be subject “to stricter disclosure rules or even be banned,” according to Reuters’ reading of the document.
Such entities also include mining farms, which as Bruegel’s document has reportedly stated, are forbidden in countries such as China.
Bruegel has also reportedly proposed the need for more transparent rules for ICOs, especially given the prevalence of entities that use the fundraising model to launch utility tokens – which, as they are not securities, are largely “unregulated” under EU financial laws.
As Cointelegraph has reported, details about EU authorities’ preparation for Friday’s meeting first emerged earlier this month, with member state representatives reportedly preparing to voice their concerns over the potential for cryptocurrencies’ use for illicit ends such as tax evasion, terrorist financing and money laundering.
Nonetheless, parties involved are said to recognize that ICOs “have established an effective and efficient way to raise capital,” and could help to integrate capital markets across the EU.