Finance Ministers in the European Union’s member states are taking a closer look at cryptocurrencies and the regulatory challenges they pose.
They will be discussing whether or not regulations on the industry should be tightened and will be looking at issues including the lack of industry transparency, and the misuse of cryptocurrency for illicit purposes, like money laundering, tax evasion, and terrorism financing.
The meeting will be taking place in Vienna on September 7th, according to a draft note obtained by Bloomberg.
According to the document, European regulators notably view Initial Coin Offerings as an “efficient way to raise capital” and are interested in looking at how cryptocurrencies can modernize current economic systems, meaning that the meeting will not be entirely negative.
The meeting comes as global regulators are taking a closer look at the cryptocurrency industry and how to best regulate the relatively young markets. It is unclear whether any harsh stances will be taken that affect the cryptocurrency markets.
Global Regulators Taking Conflicting Approaches To Industry Regulation
Regulators in China have notably been working tirelessly to maintain their government’s ban on cryptocurrencies, but most countries are taking far more well-reasoned approaches to the industry.
Although it is unclear what the results of the upcoming EU regulator’s meeting will be, the group has taken a “do-no-harm” approach to the industry, allowing for growth and innovation while trying to reduce the amount of fraud and illicit activities.
Regulatory groups in the United States have been sending mixed signals to investors, although their approaches generally appear to be reasonable.
The Securities Exchange Commission (SEC) has been fairly quiet on cryptocurrency regulation but has been rejecting countless ETF applications due to fears of “market manipulation” and volatility.
The SEC’s regulatory counterpart, the Commodities and Futures Trading Commission (CFTC) has been advocating for the cryptocurrency markets, expressing that the technology and investors deserve “respect” and that regulations should only act to benefit the markets and investors.
Notably, the US Treasury Secretary, Steve Mnuchin, advocated for a sandbox regulatory environment for the cryptocurrency and blockchain industry in his department’s Fintech report addressed to US President Donald Trump.
In the report, Mnuchin stated that:
“Internationally, many countries have established ‘innovation facilitators’ and various regulatory ‘sandboxes’ — testing grounds for innovation…While replicating this approach in the United States is complicated by the fragmentation of our financial regulatory system, Treasury is committed to working with federal and state financial regulators to establish a unified solution that accomplishes these objectives — in essence, a regulatory sandbox.”
Mnuchin also added that the United States must “stay abreast of developments in technology and to properly tailor regulations in a manner that does not constrain innovation,” while speaking about crypto and blockchain technology.
Japan has notably been focused more on regulating cryptocurrency exchanges rather than the broader crypto markets. One such action taken by Japanese regulatory authorities is the targeting of cryptocurrencies with anonymity features, like Monero and Zcash, forcing exchanges to remove them.
Japan has also taken steps to reduce speculative investing associated with cryptocurrencies, like imposing a cap on crypto leverage trading, discouraging investors from making high-risk trades using borrowed crypto.
As the cryptocurrency markets continue to grow and adoption becomes more widespread, it is presumable that global regulators will begin to synchronize their regulatory measures in an effort to incubate innovation while protecting investor’s funds.
This story originally appeared in News BTC. Image courtesy of Shutterstock.