Feeds

Crack Euro banker team to probe whether virtual currencies should be regulated

What do you think they'll decide?

The Power of One Infographic

The European Banking Authority (EBA) will create a taskforce to advise it on whether virtual currencies should be regulated.

The watchdog said that the taskforce will be created before July and have the objective of answering the question of whether virtual currencies "can and ought to be regulated".

The taskforce will analyse the risks to consumers of using virtual currencies "as a means of payments" as well as the risks to regulators in ensuring that the trading of virtual currencies does not impinge on their ability to meet their "anti-money laundering objectives", according to the EBA.

It said the risk of money-laundering activity through the trading of virtual currencies may arise because "the anonymous nature of virtual currencies is conducive to this type of activity".

Other potential risks for "investors from using virtual currencies for speculative purposes or from buying investment products that are based on virtual currencies (e.g ETFs using Bitcoins as an underlying asset); and for societies more widely, as a result of virtual currencies being used for criminal activities, such as the anonymous purchase of illegal goods, including drugs and weapons," will also be investigated by the taskforce, the EBA said in a new report (40-page / 864KB PDF).

The EBA has previously reported on the risk associated with virtual currencies. Consumers risk losing their money by "buying, holding or trading" them, it warned in December. This is because virtual currencies, such as Bitcoin, are not specifically regulated within the EU.

It said that consumers lack protection against the insolvency of virtual currency platforms and that they do not have refund rights when they use virtual currencies in transactions, and may also have to pay tax on the assets.

The most commonly cited virtual currency is Bitcoin. Bitcoin is a digital asset with a monetary value but which is currently not recognised as an official currency anywhere in the world. Some retailers accept payment by Bitcoin for goods and services, but most traders, especially in the EU, have not yet put systems in place to accept Bitcoin transactions.

The trading of Bitcoin is not regulated within the UK or broadly across the EU currently, but technology and payments law specialist Angus McFadyen of Pinsent Masons, the law firm behind Out-Law.com, previously said that proposed new EU laws on payment services leave open the possibility of Bitcoin being regulated in future.

Technology law expert Luke Scanlon of Pinsent Masons recently sought to explain whether Bitcoin can be deemed as being "money" or an "asset" and why the answer is important to determining whether and how it could be regulated.

Copyright © 2014, Out-Law.com

Out-Law.com is part of international law firm Pinsent Masons.

HP ProLiant Gen8: Integrated lifecycle automation

More from The Register

next story
Yorkshire cops fail to grasp principle behind BT Fon Wi-Fi network
'Prevent people that are passing by to hook up to your network', pleads plod
UK government officially adopts Open Document Format
Microsoft insurgency fails, earns snarky remark from UK digital services head
Major problems beset UK ISP filth filters: But it's OK, nobody uses them
It's almost as though pr0n was actually rather popular
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
MPs wave through Blighty's 'EMERGENCY' surveillance laws
Only 49 politcos voted against DRIP bill
Help yourself to anyone's photos FOR FREE, suggests UK.gov
Copyright law reforms will keep m'learned friends busy
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.