Understanding the Conversation
On January 25th, 2016, the European Parliament’s Economic and Monetary Affairs Committee (ECON) held an enlightening public hearing centered on the complexities of virtual currencies and their regulatory frameworks. Discussions predominantly revolved around the potential for these digital currencies to be utilized in illegal activities, particularly money laundering and the funding of terrorism. A hot topic, indeed!
Debunking the Myths
Sean Ennis, the Senior Economist at OECD, delivered a compelling case for virtual currencies that challenged popular misconceptions. Ennis argued that despite their potential for abuse, virtual currencies are inherently more secure compared to traditional paper money. He noted that while cash can facilitate illicit activities with ease, the structured nature of cryptocurrencies can essentially offer more safety and transparency.
“Virtual currencies could provide stronger safeguards compared to cash!” – Sean Ennis
Additionally, he pointed out how the UK’s lenient regulatory stance on peer-to-peer lending has fostered innovation, suggesting that Europe could learn from this model.
The Transparency Factor
Sian Jones, founder of EDCAB, emphasized the power of blockchain technology during the hearing. She passionately declared:
“Blockchain delivers trust in an otherwise trustless realm. It provides a single source of truth that cannot be altered or corrupted.”
Jones highlighted that contrary to common belief, blockchain technology offers pseudo-anonymity, not actual anonymity, thereby allowing for significant transparency in financial transactions.
Monitoring versus Stringent Regulations
As the discussion continued, a key policymaker suggested that instead of enforcing strict regulations on Bitcoin, the EU should closely monitor its usage to safeguard against risks arising from terrorism financing and money laundering, particularly in the aftermath of the Paris attacks. Olivier Salles from the European Commission pointed to the existing risks associated with virtual currencies, such as price volatility and cybersecurity threats, advocating for a cautious approach focused on monitoring.
Expert Insights
Following the hearing, Cointelegraph caught up with Sian Jones to gain insight on her perspective. Surprisingly, she noted the absence of regulators at the event, which seemed to correspond with the policymakers’ reluctance to hastily enact laws that could stifle innovation.
Reflecting on her expectations for the final report, she stated: “The experience of EU institutions makes predicting outcomes difficult. Amendments to anti-money laundering regulations seem likely, but predictions on systemic consumer protection responses are trickier. We should brace ourselves for some preventive measures!”
