On Friday, Valdis Dombrovskis Vice-President of the European Commission made remarks on cryptocurrencies and ICOs. He was talking at a press conference in Vienna for the Economic and Financial Affairs Council (ECOFIN).
Firstly, the ECOFIN has had a look at crypto-assets and admitted that “[they] are here to stay.”
This should calm any fear that the EU might come down especially hard on Bitcoin and other cryptocurrencies.
The Council also sees potential in ICOs saying they could “emerge as a viable form of alternative financing.”
However, they also see its imperfections. Particularly how a lack of transparency and investor protection can lead to fraud, money laundering, and hacking.
Consequently, the Council will “continue monitoring the developments in this area.”
The challenge regulators face, the Council says, is “how to categorize and classify them.” Or more specifically, they aren’t sure whether to apply existing EU rules or create new ones.
To decide between the two options, the ECOFIN is working with the European Supervisory Authorities to complete a “regulatory mapping” of crypto-assets.
For example, other jurisdictions have split cryptocurrencies into commodities, securities, and potentially advance payments for services. In the US, Bitcoin and Ether are treated as commodities at the moment. And therefore would come under the remit of legislation applicable to commodity trading.
When startups have ICOs, many regulators consider the coins or tokens as securities. Last week there was another EU debate which looked to see whether ICOs should come within new crowdfunding legislation.
To end the conference, the Council reminded the listeners that they have already expanded the scope of EU anti-money laundering and anti-terrorism laws to include crypto exchanges and custodian wallet providers.