European Commission Wants Clear and Frequent Warnings About Crypto
Warnings about cryptocurrency-related risks must be clear, frequent, and across all jurisdictions, Valdis Dombrovskis, Vice-President of the EU Commission, in charge of the Euro, Social Dialogue, Financial Stability, Financial Services and Capital Markets Union, said.
He was speaking at a briefing in Brussels, following a roundtable on “Cryptocurrencies – Opportunities and Risks” hosted by the European Commission.
“Cryptocurrencies, which are not currencies in the traditional sense, and whose value is not guaranteed, have become subject of considerable speculation. This exposes consumers and investors to substantial risk including the risk to lose their investment,” Dombrovskis said.
Participants of the roundtable included EU institutions, EU countries, supervisors, central banks, industry, academics and crypto entrepreneurs.
The press release that announced the roundtable explained the need for this in the first place: “So-called cryptocurrencies and their underlying blockchain technology is affecting many sectors of the economy, including finance. In this context, the goal of the Commission is to ensure investor protection, market integrity and financial stability while taking full advantage of these new technological developments.”
Dombrovskis summed up the roundtable in three main points: the implications of crypto for financial markets, the risks and the opportunities, and the development of ICOs (initial coin offerings).
The takeaway was, perhaps expectedly, that blockchain holds great potential and that Europe “must embrace this innovation”. Dombrovskis recognized ICOs as ways for funding “innovative firms,” but is worried about “lack of transparency regarding the identity of the issuers and underlying business plans.” The Commission has yet to determine if regulatory action at EU level is required.
The EC’s stance on blockchain and cryptocurrency remains similar to the general consensus of the World Economic Forum in Davos, Switzerland, this year, but nothing new has been said. It is speculated that the silence is deliberate, so the European Commission will release more concrete information about its stance after consulting with G20.
The FinTech Action Plan of the European Commission is to be released next month.