Austria Finance Minister Hartwig Löger is urging both his country and the broader European Union to treat cryptocurrencies such as bitcoin in a regulatory fashion as they do now with regard to gold and derivatives.
“The cryptocurrencies are in the process of massively damaging the reputation of the financial market,” Mr. Löger insisted, “and jeopardizing the reputation of a young but very important sector for the financial market of the future,” arguing it will be a challenge to both regulate and allow for the nascent industries to grow.
He went on to suggest financial experts and even the financial technology sector have both warned Oesterreichische Nationalbank, Austria’s central bank, and the country’s Financial Market Authority (FMA) about cryptocurrency’s danger, asking for regulation. The local press even used the verb “demanded.”
Mr. Löger continued, “Cryptocurrencies are significantly gaining importance in the fight against money laundering and terrorism financing. That’s an important aspect for the changes we support. We need more trust and more security.” Among his recommendations is to treat bitcoin “similar to the trade in gold and derivatives,” including mandatory anti-money laundering (AML) reporting crypto transactions of more than €10,000.
Mr. Löger, 52, and his statements were openly welcomed by the Austrian FMA in a parallel statement released the same day, 23 February. “The Board of the Austrian Financial Market Authority (FMA), Helmut Ettl and Klaus Kumpfmüller, welcome the move by Finance Minister Hartwig Löger to subject cryptocurrencies such as Bitcoin to regulation and supervision.” Worriedly, the Board of Management stressed, “Since digital currencies are essentially a phenomenon of the Internet and are offered there without limits, regulation and oversight of cross-border cooperation are also of great importance.”
His proposals would further empower the country’s Money Laundering Registration Office of the Federal Criminal Police Office in identifying holders of crypto, placing exchanges under the auspices of the FMA. Mr. Löger’s comments were not fixated solely on bitcoin, however, as he also addressed initial coin offerings (ICOs). All ICOs would be subject to registration requirements and would be required to offer something like a “digital prospectus.”
The borderless aspects so befuddling regulators when it comes to bitcoin are to be considered this March with the advent of a Fintech Regulatory Council. Reports suggest it will be comprised of experts who “consider regulatory approaches and coordinate the positions of various institutions” in an effort to reconcile wider “European initiatives…with national policies.”
Experts expect Mr. Löger’s will bring his case to Portugal’s Mario Centeno when the two meet as part of Eurogroup this weekend. EU Commission meetings on Monday will consider cryptocurrencies in relation to the European Money Laundering Directive.
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Images courtesy of Pixabay.
Written by C. Edward Kelso