European Parliament Committee Discusses Virtual Currency Regulation

On Monday, a European Parliament committee held a public hearing on the pros and cons of virtual currencies such as Bitcoin in Brussels. The hearing of the Committee on Economic and Monetary Affairs (ECON) was a preparatory measure for the agency's upcoming own-initiative (INI) report, CoinDesk reported.

The committee discussed the possibility of regulating digital currencies following the recent terrorist attacks in Paris. Topics included the risks and challenges posed by publicly traded virtual currencies, as well as the impact of blockchain and distributed ledger technology.

The discussion included some prominent figures including representatives from the European Commission and the Organisation for Economic Co-operation and Development (OECD), Founder of European Digital Currency and Blockchain Technology Forum (EDCAB) as well as academicians and relevant market actors.

Jakob von Weizsäckerm, German MEP and committee member, in his opening remarks stated the reasons as to why the regulation of virtual currencies is being considered.

"We are considering in the follow-up of the terrible Paris attacks whether there might be a need to regulate virtual currencies. It has been considered in the past and we are certainly looking at options in the wake of the terrorist attacks”, CoinDesk quoted Von Weizsäckerm.

However, he made an important point that as the technology is still evolving; it should not be overregulated as there are potential advantages offered by it.

Siân Jones, founder of the EDCAB and advisor to COINsult, explained that the use of virtual currencies for money laundering purposes has been "grossly overstated", as the ability to trace past transactions makes them unsuitable for such activities, as reported by CoinDesk.

In his concluding remarks, Von Weizsäckerm said that regulators have a tendency to apply "precautionary" regulation, and that when it comes to new areas like virtual currencies, keeping an open mind is quite a challenge. He recommended "precautionary monitoring" so regulators can keep abreast of the latest developments taking place in the industry.

CoinDesk noted the general mood of the discussion suggested that the panelist believed that the virtual currency and blockchain industry should not be overly regulated for fear of stifling the new and potentially advantageous technology.