It has become apparent that cryptocurrency regulation in Europe is still several years away, if not longer. A few months ago, the ECB made it clear it was not interested in intervening where cryptocurrencies were concerned. Similar statements have now been issued by the EU Banking Authority. All of this is a positive development for the industry, although it also means there is still a lack of “legality” in Europe.
Depending on how you want to look at it, a lack of cryptocurrency regulation can be a good thing or a bad thing. While most industry enthusiasts aren’t too keen on governments or banks meddling with cryptocurrency, no one can deny those efforts provide more legitimacy to the industry as a whole. As of right now, Europe is well behind the curve when it comes to cryptocurrency in many ways, including regulation, adoption, and general interest.
It seems not much will change in terms of regulating Bitcoin and other cryptocurrencies. With the European Central Bank not intervening in these markets, a clear message has been sent to the entire continent. Governments across various European countries have also shown little to no interest in regulating cryptocurrencies either, although some countries have introduced taxation guidelines over the last few years.
More recently, a few comments by the European Union Banking Authority seem to indicate there is no reason to regulate cryptocurrencies as of right now, as the impact of these markets is not sufficient to warrant such an approach. Additionally, there is no need for excessive regulation of any kind either, as cryptocurrencies simply do not apply to existing financial guidelines. That is a rather interesting statement, although it’s one that makes a lot of sense.
EBA chairman Andrea Enria claims there is insufficiently strong argumentation to attract cryptocurrencies under the full scope of regulation. It is a statement that will certainly irk some European central banks as of right now, although the comment holds some merit. Regulation and restriction of cryptocurrencies would not serve anyone at this point in time, as innovative business models should not be banned.
Although the EBA created a regulatory framework for cryptocurrency back in 2014, it has not updated those guidelines since. Nor will it do so in the near future, as the EBA prefers a more nuanced strategy. Warning consumers about the risks associated with these investments remains the default strategy for the time being. So far, it has seemingly served its purpose.
For now, there will be no excessive regulation of cryptocurrency across the European Union. That does not mean this situation will never change, but for now, it appears to be the approach which makes the most sense for all parties. Competition for established banks is a positive development, but only if those companies adhere to basic guidelines. For now, cryptocurrencies do not warrant any major changes in this regard, as there is still a lack of understanding as to how this industry works exactly.