Bitcoin’s pseudonymity, since its creation is one scoring point for the cryptocurrency considering its holders are confident that no company or government can get a hold of their money because of the network’s decentralized nature. However, a recent announcement by the president of the European Central Bank (ECB) in an interview at the Reuters Next conference questions Bitcoin’s pseudonymity.
President Christine Lagarde stated that Bitcoin should be regulated globally, for reasons that criminals use the digital currency for money laundering and so precautionary actions should be taken to stop future occurrences.
Due to the recent upsurge in the price of BTC in the last few months, which has enriched Bitcoin holders with its massive increase in value, a lot of people have flooded into the cryptocurrency community in general including criminal minds.
Lagarde stated, “(Bitcoin) is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity.” And as a possible solution to the problem at hand, she mentioned that Bitcoin has to be regulated, “…This has to be applied and agreed upon … at a global level because if there is an escape, that escape will be used.”
Although Lagarde emphasized the need for cryptocurrencies to be regulated, calling out to some regulators from across the world, the report mentioned that she did not exactly point out any particular money laundering activity.
While it is true that the cryptocurrency community has little or no regulatory influence over it, most cryptocurrencies enforce the anti-money laundering policy [AML].
In light of cryptocurrency regulation, Coinfomania reported that The Association for Financial Markets in Europe (AFME) concluded that setting up a pan-European crypto-asset taxonomy to check cryptocurrency activities would help to enforce understanding and cooperation among nations in the region using cryptocurrency.
The AFME hopes that by creating rules, and by making use of “activities-based and technology agnostic regulation,” the risks involved in trading cryptocurrencies would be greatly reduced.
Stating the import of setting up a cryptocurrency regulatory body in Europe, James Kemp, AFME’s managing director and head of technology, said, “There has been a rapid rise in the development of crypto-assets […] however, to realize those benefits, it is increasingly important that crypto-asset regulation is coordinated at the regional and global levels to foster innovation while promoting financial stability and ensuring a level playing field.
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Author: Abigail Michelle