On August 7, the European Central Bank (ECB) announced it will refine its guidelines and rules related to the monitoring of cryptocurrency transactions. This will occur for transactions that are both on and off the chain, and it is hoped that these guidelines will be in place within the next 60 days.
In a report provided by the ECB, entitled “Understanding the crypto-asset phenomenon, its risks and measurement issues,” the financial organization explained that there is a growing need to close “the data gaps associated with crypto-assets.” The report explained that this continues to be a significant challenge for both regulators and financial institutions.
The ECB has been pushing regulators to act quickly in regards to creating guidelines and regulations related to digital currency. As Facebook is getting closer to releasing their own digital currency known as Libra, the executive board at the ECB has been prodding for new guidelines.
Explained ECB executive board member Benoit Coeure, “It’s out of the question to allow them to develop in a regulatory void for their financial service activities because it’s just too dangerous. We have to move more quickly than we’ve been able to do up until now.”
This has become the biggest concern at the European Central Bank. The report explained that the risks and effects of crypto assets on the entire economy demands that both financial spheres become interconnected under a set of regulations that ensures the validity and success of both.
The blockchain itself will provide a great deal of transparency. These systems are built so that the efficiency and ability to monitor transactions across the platform is transparent and open. However, the report noted that the decentralization and lack of consistent regulation is a major issue. Coupled with many financial institutions’ concerns related to fraud or criminal enterprises using these kinds of currencies only complicates the situation, demanding that regulators create policies and guidelines immediately.
Now, the ECB finds itself in the position of an advocate. They are pushing on regulators to act in a more immediate fashion. It is clear that the new Facebook digital coin will be available soon, possibly by the end of summer, necessitating a greater sense of urgency.
Unfortunately, no timetable has been set as to when these regulations may be created. That is likely to be causing a greater sense of nervousness as Europe awaits the arrival of the new Facebook coin.
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