Germany Joins European Drive For Global Regulation Of Bitcoin

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Germany has joined the European push to regulate bitcoin out of concern it is being used by money-launderers, drug traffickers and terrorists.

Germany’s Finance Ministry welcomed French Finance Minister Bruno Le Maire’s proposal to ask the Group of 20 to consider joint bitcoin regulation, Bloomberg reports. The Italian government shares these concerns and is open to regulation, while the European Union supports bitcoin rules that the U.K. wants.

Germany Cites Speculative Risks

The German Finance Ministry said it makes sense to consider virtual currencies’ speculative risks and their effects on the international financial system.

The ministry said the next meeting of G-20 finance ministers and central bank governors would be an opportune time o discuss the issue.

Bitcoin Futures Raise Concern

Concern has increased in Europe as a result of the bitcoin futures trading launched Sunday by the CME Group, which came one week after the Cboe Global Markets introduced similar derivatives.

Germany is Europe’s biggest economy, and the finance ministry monitors financial market developments closely, the ministry said, including the current developments. In a weekend interview on France’s LCI TV, Le Maire made the worries public that have been voiced previously as bitcoin has moved further into mainstream finance.

He said he does not like bitcoin because it can hide terrorism and money laundering. He also is concerned about it being a speculative risk for people who are trying to save money. Pier Carlo Padoan, Italy’s finance minister, said he would discuss Le Maire’s proposal, according to a government official who did not want to be identified publicly.

Lawmakers To Strengthen Anti-Money Laundering Rules

EU lawmakers and representatives on Friday agreed on the need to revise the bloc’s anti-money laundering rules, expanding the framework to include firms overseeing and transferring virtual currencies, according to the European Commission. The companies will have to identify their customers and report suspicious activity.

Stephen Barclay, the economic secretary to the British Treasury, told lawmakers in November new rules would subject virtual currency exchange platforms and wallet providers to anti-money laundering and counter-terrorist financing regulation. The U.K. government said digital currencies can facilitate cybercrime. The Treasury further noted there is little evidence digital currencies are used to launder money, but such activity is expected to increase. Hence, the proposed regulations would be helpful.

Also read: Bitcoin has our heightened attention: EU financial regulation chief

Economic Experts Distrust Bitcoin

Joseph Stiglitz, a Nobel economics laureate, last month said bitcoin should be outlawed and that it serves no socially useful function. Robert Shiller, also an economics laureate, said bitcoin’s attraction is a narrative akin to a mystery movie that attracts people who want to outsmart the system.

Germany’s financial supervisor last month warned about cryptocurrencies’ risks for consumers. The supervisor said regulation at the national level is not enough due to digital currencies’ global reach.

Featured image from Shutterstock.

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