EU seeks to counter threat of bitcoin bubble bursting

European Commission Vice-President warned in a letter to the heads of three financial EU regulators to update financial rules in order to face high volatility of bitcoin
22 December 2017   384

On Wednesday European Commission Vice-President Valdis Dombrovskis warned in a letter to the heads of three financial EU regulators to urgently update financial rules in order to face high volatility of bitcoin.

Valdis Dombrovskis, a former Latvian prime minister, also urged to improve the applicability of regulatory framework to bitcoin and cryptocurrencies. He added that the agencies must draw up new plans in light of the recent market developments.

The developments relating to bitcoin and crypto-currencies in recent weeks require our heightened attention. There are clear risks for investors and consumers associated to price volatility – including the risk of a complete loss of investment, operational and security failures, market manipulation, and liability gaps.

 

Valdis Dombrovskis

Vice-President, European Commission

We have reported that in the beginning of December the British government announced its plans to introduce strict regulations of bitcoin and other cryptocurrencies.

Bank of America: Cryptocurrencies Are a Threat

Bank of America (BoA) has admitted to US regulators it can not pretend any longer that cryptocurrencies are not a threat
23 February 2018   124

On February 22, the report was filed with the US Securities and Exchange Commission (SEC). It listed a range of economic, geopolitical, and operational risks that the Charlotte, NC-based bank faces as it heads into the new fiscal year. Crypto adoption was on the list for the first time.

Bank of America (BoA), which recently banned purchasing of crypto with credit cards, stated that this and other similar policies could cost the bank clients.

Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies.

The second largest bank in the U.S. said that adoption of cryptocurrencies could require the bank to make “substantial expenditures” to update its existing services and remain competitive with upstart firms.

The widespread adoption of new technologies, including internet services, cryptocurrencies, and payment systems, could require substantial expenditures to modify or adapt our existing products and services.

According to the Bank of America, cryptocurrencies could limit the institution’s ability to comply with anti-money laundering regulations.

Eventually, this is one of the first public admissions that financial institutions are beginning to worry that mass cryptocurrency adoption could one day become a reality.