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Austria Plans to Regulate Bitcoin Like Gold, Derivatives

Last Updated March 4, 2021 5:05 PM
Josiah Wilmoth
Last Updated March 4, 2021 5:05 PM

Austria’s finance ministry said that it intends to regulate Bitcoin and other cryptocurrencies similarly to how it currently governs gold and derivatives trading, and it hopes the European Union will do the same.

Regulators across the world have grown increasingly concerned about the immutability and decentralized nature of blockchain transactions, which they say makes them ideal tools for money launderers and other nefarious actors. This, of course, is despite the fact that the majority of illicit transactions are still denominated in US dollars.

In the quest to combat this perceived threat, Hartwig Loeger, Austria’s finance minister, said that he believes rules currently governing precious metals and derivatives trading will enable the government to prevent cryptocurrencies from being used to launder illicit funds.

“Cryptocurrencies are significantly gaining importance in the fight against money laundering and terrorism financing,” Loeger said in a statement, according to a Bloomberg  report. “That’s an important aspect for the changes we support. We need more trust and more security.”

Loeger added that he believed initial coin offerings should be essentially treated as securities, requiring operators to register “digital prospectuses” with financial supervisors and seek regulatory approval before they begin accepting contributions.

However, given Bitcoin’s borderless nature, Loeger said that it was vital for the European Union to pursue an international regulatory framework on cryptocurrency, and he said he planned to discuss the issue with Portugal’s finance minister in their Friday meeting.

This increased attention from Austrian regulators comes less than two weeks after reports emerged that an Austria-based investment scheme called “Optioment” had fleeced more than 10,000 investors for 12,000 BTC, worth more than $122 million at current exchange rates.

However, regulators across Europe have been eying cryptocurrencies and associated financial products with increased scrutiny in recent days.

As CCN.com reported, France’s financial regulators have put online trading platforms on notice that cash-settled cryptocurrency derivatives products fall under government oversight and must comply with existing market regulations.

The UK Treasury, meanwhile, is conducting an inquiry  into both the benefits and risks of cryptocurrency, as well as blockchain technology in general.

Featured image from Shutterstock.