The European Banking Authority is warning financial institutions to avoid dealing in Bitcoin and other virtual currencies until a forthcoming regulatory regime is established. It also laid out various elements that should be a part of future regulation.
The EBA, in a recent opinion, identified nearly 70 risks stemming from the new type of currency that could affect users, market participants, and the financial integrity of institutions. The authority, which conducted its research with other EU financial agencies, acknowledged virtual currencies have some benefits, such as financial inclusion and faster, less costly transactions. But the EBA said currently “the risks outweigh the benefits.” It also pointed out the benefits are “less relevant” in the EU because of existing regulations providing for faster transactions in the bloc.
