Feeds

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

What do you think they'll decide?

Maximizing your infrastructure through virtualization

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.

Top three mobile application threats

More from The Register

next story
Arrr: Freetard-bothering Digital Economy Act tied up, thrown in the hold
Ministry of Fun confirms: Yes, we're busy doing nothing
Help yourself to anyone's photos FOR FREE, suggests UK.gov
Copyright law reforms will keep m'learned friends busy
Apple smacked with privacy sueball over Location Services
Class action launched on behalf of 100 million iPhone owners
US judge: YES, cops or feds so can slurp an ENTIRE Gmail account
Crooks don't have folders labelled 'drug records', opines NY beak
ONE EMAIL costs mining company $300 MEEELION
Environmental activist walks free after hoax sent share price over a cliff
UK government officially adopts Open Document Format
Microsoft insurgency fails, earns snarky remark from UK digital services head
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
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.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.