According to a Reuters report, the EU is looking to regulate cryptocurrencies by 2024 at the latest. The regulations will be targeted in the first place against stablecoins such as Libra, USDT or DAI. The EU wants to use blockchain technology to make fast and cheap cross-border transfers available.
Currently, approximately 78% of all payments inside the Eurozone are executed in cash. The EU wants to promote the use of digital payment methods. The importance of cashless payments has especially risen during the Corona pandemic.
According to a new legislative proposal, the current cryptocurrency regulations should be checked again, readjusted, and if needed expanded. Gaps in the current legislation will have to be closed.
“By 2024, the EU should put in place a comprehensive framework enabling the uptake of distributed ledger technology (DLT) and crypto-assets in the financial sector,” the documents said. “It should also address the risks associated with these technologies.”Excerpt from EU documents
After Libra was announced last year, and Facebook recently launching its own Fin-tech company with “Facebook Financial”, politicians started looking more into stablecoins and their potential. Libra is meant to become a stable cryptocurrency developed under Facebook’s leadership. Multiple countries are working on launching their own central bank digital currency (CBDC), most prominently China. Brussels will need to adapt to this new technology if it wishes not to lose its competitive edge.
Important regulations will address Anti Money Laundering (AML) and identification (KYC). These regulations should be implemented with the next 4 years, in order to quickly and easily offer financial services to new customers.
“By 2024, the principle of passporting and a one-stop shop licensing should apply in all areas which hold strong potential for digital finance.”Excerpt from EU documents
Cryptocurrencies will carry important advantages
Currently, wire transfers take days to settle, often at high costs. Blockchain technology allows for quick and cheap payments over the internet. Especially the stablecoins are of high interest.
Instant payments built on blockchain technology have many use cases that go beyond traditional payments, especially fro physical and online payments, which are currently dominated by card payments (debit, credit, etc…).
There are always unsettling news roaming around when it comes to stablecoins. For example, the G20 affiliated Financial Stability Board (FSB) recommends a complete ban of stablecoins. Hopes remain that governments and banks alike can take the middle way approach, and not resort to extreme scenarios.
Trading Bitcoin is too complicated?
We highly recommend our Crypto-Starter-Kit to you!
Follow us on Social Media and subscribe to our free crypto newsletter!
Diskutiere mit uns!
This post may contain promotional links that help us fund the site. When you click on the links, we receive a commission - but the prices do not change for you! :)
Disclaimer: The authors of this website may have invested in crypto currencies themselves. They are not financial advisors and only express their opinions. Anyone considering investing in crypto currencies should be well informed about these high-risk assets.
Trading with financial products, especially with CFDs involves a high level of risk and is therefore not suitable for security-conscious investors. CFDs are complex instruments and carry a high risk of losing money quickly through leverage. Be aware that most private Investors lose money, if they decide to trade CFDs. Any type of trading and speculation in financial products that can produce an unusually high return is also associated with increased risk to lose money. Note that past gains are no guarantee of positive results in the future.
You might also like
More from Regulation
Canadian regulators have approved three Ethereum Exchange Traded Funds (ETFs) in one day, ahead of the widely anticipated EIP1559 upgrade, …
JP Morgan sent its HNWI a report on Bitcoin. This report explains how cryptos are considered an untapped industry, and …
On February 9th, 2021, Don Tapscott, author, businessman, and leader of the Blockchain Research Institute, published a 120-page comprehensive report …