On 26th April 2016, the European Parliament’s Committee on Economic and Monetary Affairs voted in favour of adopting its report on virtual currencies. Accordingly the full parliament shall vote on this matter at May’s plenary meeting.
The report acknowledges that virtual currencies (VC), Bitcoin in particular and their underlying innovation, distributed ledger technology (DLT) is set to have a significant impact on the financial sector and beyond. It is therefore important to regulate the development of VC and DLT. Rapid and forceful regulatory measures are essential in order to address risks before they become systemic. The report ascertains that the key to smart regulation in such an environment of dynamic innovation is for the regulator to develop sufficient capacity, including technical expertise. Pre-emptive and heavy-handed regulation that would stifle growth should and can be avoided. The report therefore encourages precautionary monitoring.
In order to assure the regulatory capacities needed for this approach, the rapporteur calls for the creation of a horizontal Task Force DLT to be set up under the leadership of the Commission. Such Task Force would actively monitor how the technology evolves and make timely proposals for specific regulation if, and when, the need arises.
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Click here to read the draft report.