Bitcoin Regulation At G-20 Level Has Become A Reality At EU With Germany Being Its Latest Addition

In the backdrop of the awe-inspiring price rise of Bitcoin and the growing use of the same by drug traffickers, money launders and terrorists, government bodies worldwide are trying to uphold a regulatory flag in their respective peripheries. Germany has been the recent addition to the list of European governments who have been proposing Bitcoin regulation, according to Bloomberg.

The Finance Ministry of Germany has revealed that it is open to the proposal given by French Finance Minister Bruno Le Maire asking his contemporaries in the Group of 20 to consider the positive prospects of bringing upon bitcoin regulation. Similar concerns have also been revealed by the Italian government which has also welcomed the regulation discussion with open arms. European Union is working hard to bring upon rules backed by the United Kingdom which shall apply to virtual currencies such as Bitcoins.

Also Read: Bitcoin Regulation Proposed By Romanian Minister

The Finance Ministry in Berlin revealed through an emailed response to questions placed that, “it makes sense to discuss the speculative risks of virtual currencies and their impact on the financial system at international level.”

It also added that the upcoming rendezvous of central bank governors and G-20 finance ministers would be “a good opportunity to do so.”

The launch of Bitcoin futures by CME Group Inc. on Sunday night propelled the virtual currency boat a further step towards global acceptability by infusing concerns amidst the European nations to immediately bring upon regulatory legislations. This was previously followed by the launch of Bitcoin futures by its rival CBOE Global Markets Inc. The derivatives introduced were similar to the ones created for tackling the financial crisis of 2008 as an alternative to government and bank-issued currencies.

The price of Bitcoin created a fresh record by hitting the $20,000 mark on Monday. The Finance Ministry of Germany, which is the biggest European economy, “monitors developments in the financial market very closely. This also applies to the current development of bitcoin.”

The concerns felt by Europe presently had also been voiced in certain forums in regards to a currency which is slowly stepping into the world of mainstream finance. However, such worries were made public by Le Maire through a weekend interview conducted by France’s LCI television. When asked about Bitcoin, Le Maire said that, “I don’t like it. It can hide activities such as drug trafficking and terrorism.” He was also dubious of the safety standards of its users since, “there is an obvious speculative risk, we need to look at it, study it.”

An unnamed government official belonging to Rome has revealed that Pier Carlo Padoan, the Italian Finance Minister is ready to discuss about the proposal given by Le Maire. The ministry is yet to receive any such request from Paris. Meanwhile the representative of member states and EU lawmakers agreed in unison with the proposal of anti-money laundering rules on Friday which shall extend the legal framework to firms which, “are in charge of holding, storing and transferring virtual currencies,” according to a statement set out by the European Commission.

The companies, “will have to identify their customers and report any suspicious activity.” Economic Secretary to the British Treasury, Stephen Barclay pointed it out to lawmakers on 3rd November that new rules would “bring virtual currency exchange platforms and custodian wallet providers into anti-money laundering and counter-terrorist financing regulation.”

A note published by the Treasury hinted that for the British government, these crypto currencies, “can be used to enable and facilitate cybercrime. There is little current evidence of them being used to launder money, though this risk is expected to grow. That is why these regulations will help.”

Bitcoin was denounced by two Nobel economics laureates last month. Robert J. Shiller drew comparison in between the surging attraction of the digital currency with that of a narrative akin to a “mystery movie” which draws in people who wish to outsmart the system. Joseph Stiglitz revealed that it needs be outlawed, and does not serve “any socially-useful function.” Bafin, the financial supervisor of Germany had also issued warnings last month against the risks associated with the usage of cryptocurrencies by consumers. Elisabeth Roegele, the chief executive director of securities supervision at Bafin revealed during a Nov. 30th announcement that regulating bitcoin at national level cannot get the game rolling given its international dimension. Roegele also added that, “the Internet in particular does not know national borders.”

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Tarunima Ghosh Laha is a Finance Post Grad from St. Xaviers who believes Finance is more than just Balance Sheets and Ledger creation. This filmy bookworm who believes she was a sloth in past life also nourishes a penchant of owning a private zoo someday. Equipped with a laptop and online Lexicon she is all set to give finance a glamorous makeover in the form of exciting writeups with bang on info and flashy new words.

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