The hearing of the Committee on Economic and Monetary Affairs (ECON) was a preparatory measure for the agency’s forthcoming report on virtual currencies. Topics discussed included the risks and challenges posed by publicly traded virtual currencies, as well as the impact of blockchain and distributed ledger technology on which virtual currencies are based.
Panellists included representatives from the European Commission and the Organisation for Economic Co-operation and Development (OECD) as well as academics and stakeholders from the private sector.
In his opening remarks, German MEP and committee member Jakob von Weizsäcker was keen to reiterate the goal of the meeting and potential implications of its decision-making as governments look to get tougher on terrorist financing. Von Weizsäcker said:
“We are considering in the follow-up of the terrible Paris attacks whether there might be a need to regulate virtual currencies. It has been considered in the past and we are certainly looking at options in the wake of the terrorist attacks.”
However, he noted that he believes the technology should not be overregulated while it is evolving, as he recognizes that there are potential advantages offered by the technology.
Thaer Sabri, regulatory adviser and CEO of the Electronic Money Association, who overall recommended a light regulatory touch, also brought up the subject of the Paris attacks in his address, saying: “We mustn’t let the pendulum swing too far.” “As far as financial crime is concerned, industry agrees regulation is a desirable thing,” Sabri added. “If we don’t disuade criminals from using these products. the products could become disreputable.”
Offering a counter argument, Jeremy Millar, a partner at financial technology consultants Magister Advisors, said that, since it is already illegal to fund terrorists, detection is key, not regulation.
Siân Jones, founder of the European Digital Currency and Blockchain Technology Forum and advisor to COINsult, further explained that the use of virtual currencies in money laundering has been “grossly overstated”, and that the ability to easily trace past transactions renders them unsuitable for such activities.
ECON is the European Parliament committee responsible for economic and monetary union, the regulation of financial services, the free movement of capital and payments, taxation and competition policies and the international financial system.
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