Valdis Dombrovskis European Commission Bitcoin

Bitcoin Has Our Heightened Attention: EU Financial Regulation Chief

The European Commission – the executive arm of the European Union – is keeping a close eye on bitcoin markets and is reportedly urging EU banking and markets watchdogs to issue risk warnings to investors.

In statements at a news conference on Wednesday, European Commission vice president Valdis Dombrovskis expressed a ‘concerned’ take on the volatility in bitcoin prices. The official – effectively the European Union’s financial regulation chief as VP in charge of financial stability, financial services and capital markets union, – revealed bitcoin had the authority’s undivided attention.

In remarks reported by Reuters, he stated:

In recent weeks, bitcoin has our heightened attention. There are clear risks for investors and consumers associated with price volatility, including the risk of complete loss of investment, operational and security failures, market manipulation and liability gaps.

A report by the Financial Times reveals the official doing more than offering remarks on a public forum, pointing to a letter written to banking and markets watchdogs in the European Union urging them to warn bitcoin adopters of the risks in investing in the cryptocurrencies.

Specifically, Dombrovskis’ letter was sent to the heads of EU’s three supervisory agencies, namely: the European Banking Authority (EBA); the European Insurance and Occupational Pensions Authority (EIOPA) and; the European Securities and Markets Authority (ESMA).

In further remarks to reporters, Dombrovskis added:

Let me remind you, the value of bitcoin is not guaranteed by any country or issuer… Investors should realise that it can drop at any moment. And virtual currencies like bitcoin are not really currencies.

As reported previously, the European Commission first proposed strict rules for the use of cryptocurrencies in July 2016, driving legislation to include digital currency exchanges and wallet providers under the purview of the purview of the Anti-Money Laundering Directive (AMLD). The executive body also proposed a centralized database to store bitcoin and cryptocurrency adopters’ identities.

Featured image from Flickr/European People’s Party.