Report given to EU Ministers calls for more Crypto-exchange and ICO regulations
Bruegel, a Brussels-based think tank formulated a report that will be presented to the Ministers of the European Union (EU) calling for regulations of crypto-exchanges and clearer guidelines on Initial Coin Offerings (ICOs), as reported by Reuters.
The dissemination of the report comes at a crucial time, with a meeting of the Economic and Financial Affairs Ministers of the E.U. states is to be held in Austria on the 7th and 8th of September. The main topics set to be discussed are cryptocurrency and taxation of the digital economy.
In order to better handle the associated risks arising from cryptocurrencies and harness the true potential of this industry, certain regulations should be imposed on exchanges and Initial Coin Offerings (ICOs) at the EU level, as suggested in Bruegel’s report.
EU authorities have not enforced any stern regulations on the crypto-market due to their small size and the lack of trade in Bitcoin to euros. Considering the volatility of digital currencies, they have been concerned for quite a while now and have deemed regulation necessary.
The report also cites the crackdown on cryptocurrency and other stringent regulation in China, noting, “as done in China, mining farms can be forbidden.”
“Scope for regulatory arbitrage” was a key point in the report, ensuing from the migration of Hong-Kong based Binance, one of the world’s largest crypto exchanges to the Mediterranean country of Malta.
Bruegel suggests there is an urgency “to experiment and learn about the best approaches to this fast-developing technology” with reference to the skepticism in which regulators often view crypto-exchanges and calls for more open and free regulations.
There is no doubt a free fall in the value of crypto assets issued for an ICO, currencies, and tokens, in terms of market capitalization, falling from $800 billion in January to $200 billion in August. According to CoinMarketCap, the current value of Bitcoin is $6,461, a huge drop from its highest valuation of $19,783, in December 2017.