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EU body strikes back at regulators rhetoric of cryptocurrency ban

Mar 10, 2018 Posted /  4908 Views

EU body strikes back at regulators rhetoric of cryptocurrency ban

There is precise coordination in the way the regulators around the globe have called for stringent laws against the cryptocurrency and related industry. While everywhere in the media the overwhelming thought of enhanced monitoring and inspection mechanisms has been bolstered, the head of the European Union's (EU) banking regulator has struck an orchestration with the defenders that call to relieve cryptocurrencies from strenuous holds and find another way around to check the menace in the space.

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As reported by Financial Times, Andrea Enria, who is operating as the chief executive of the European Banking Authority on Friday suggested that it would be more beneficial if instead of imposing stricter regulations on virtual coins, the regulators could prevent banks and other regulated financial institutions from holding and selling cryptocurrencies. Enria in his speech specifically warned that over-regulation of fintech firms could damage the whole industry.

The comments by Enria came a week after Mark Carney, the governor of the Bank Of England called that it is right time to snub cryptocurrencies as the industry had mostly enjoyed unregulated time so far. Carney also chairs the G20's financial stability Board, and he was the latest central banker to join the rhetoric of tightening the grip on Cryptos. According to Prepared comments, Enria was quoted saying in his Copenhagen speech-

“Recently, several central banks have argued that cryptocurrencies lack the institutional back-up of a central bank and cannot fulfill the traditional functions of money . . . I am yet to be convinced that this is a sufficiently strong argument to attract cryptocurrencies under the full scope of regulation. ”

He appended during his speech that back in 2014, EBA had recommended a much better plan of reviewing the regulated companies’ susceptibility to cryptocurrencies. Enria, adds

"An excessive extension of the regulatory perimeter . . . is likely to be a sub-optimal solution."

On the other hand, FSB, which makes proposals to the G20 nations, is expected to chalk out its strategies on cryptocurrencies later this month. In the meantime, the EBA is in the process of ascertaining a “road map” pertaining to fintech developments.

If we interpret his exact speech, Enria has apparently bolstered that there should not be an enormous burden of regulations on fintech firms, if they did not perform the same functions of providing liquidity, credit, and debit. He also stated that a planned strategy was imperative in all European Union if fintech firms in the region do not want to miss out on the race with China and the US.

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Tags: Cryptocurrency ban European Union

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