The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has recently released its report on virtual currencies (VC) and distributed ledger technologies (DLT), which lists their opportunities and risks in the rapidly evolving technological landscape of payments.

Noting the current nascent stage of the technology, the ECON calls for a regulatory approach at EU level, which boost the use of VCs and DLTs, while at the same time ensuring that it does not stifle innovation or add superfluous costs to it at this early stage. It also welcomed the European Commission’s suggestions for including VC exchange platforms in the Anti-Money-Laundering Directive (AMLD) in order to end the anonymity associated with such platforms.

It recommended that the Commission to draw up a “comprehensive analysis” of VCs and accordingly consider revising the relevant EU legislation on payments, including the Payment Accounts Directive (PAD), the Payment Services Directive (PSD) and the Electronic Money Directive (EMD), based on the new possibilities afforded by new technological developments including VCs and DLT, with a view to further enhancing competition and lowering transaction costs.

In addition, the ECON also recommended the creation of a horizontal Task Force DLT (TF DLT) led by the Commission, consisting of technical and regulatory experts, in order to provide the necessary technical and regulatory expertise across the various sectors of pertinent DLT applications, as well as foster awareness and analyse the benefits and risks of DLT applications in order to make best use of their potential.

“[ECON] Stresses the importance of consumer awareness, transparency and trust when using VCs; calls on the Commission to develop, in cooperation with the Member States and the VC industry, guidelines with the aim of guaranteeing that correct, clear and complete information is provided for existing and future VC users, to allow them to make a fully informed choice and thus enhance the transparency of VC schemes in terms of how they are organised and operated and how they distinguish themselves from regulated and supervised payment systems in terms of consumer protection”, it said.