The European Union (EU) is considering creating new rules and limitations on Bitcoin and cryptocurrencies.
There are two hypotheses under consideration
The first is to limit by law the amount of Bitcoin and cryptocurrency that banks can hold.
This is a bill proposed yesterday by the Green Party, according to which banks in the European Union that hold cryptocurrencies would face particularly high limits and capital requirements.
However, it must be said that although the European Green Party (EGP) has 52 MEPs out of the total 751, it has no representative in either the European Commission or the European Council. So it does not seem at all easy that a majority can be found to support this proposal, since the Greens are not part of the current majority in the European Parliament.
However, the proposal presented by Finland’s Ville Niinistö is in some ways similar to the draft presented by the Basel Committee to always regulate the relationship between banks and cryptocurrencies, but it is still in the consultation phase.
Niinistö‘s proposal is to consider cryptocurrencies as class 2 assets, thus with the highest risk rating, such that banks would not be able to use them for loans, for example. In addition, there would be a limit on banks’ exposure of 1% of their Tier 1 capital.
EU: rules on Bitcoin
Certain cryptocurrencies would fall under class 1, but these would only be regulated stablecoins. It is curious how in this proposal Bitcoin is considered on par with the worst altcoins. Evidently among those less familiar with crypto, the abysmal difference between Bitcoin, Ethereum, and other cryptocurrencies is not yet well understood, although at least the difference between stablecoins and true cryptocurrencies is starting to be clear.
The second hypothesis is to set up a new agency created ad hoc to combat money laundering.
This is actually not just an idea, but a proposal apparently already in an advanced stage.
The new agency will be called the Anti-Money Laundering Authority (AMLA), and its creation already has the support of the European Council.
The agency will not deal specifically with cryptocurrencies, but since it is dedicated expressly to anti-money laundering it will certainly also deal with crypto transactions that are considered suspicious from this point of view.
In particular, it was the EU Council that wanted to give AMLA the powers to supervise not only certain types of credit and financial institutions, but also crypto service providers.
It seems very likely that such an agency will be created soon, so much so that it could come into operation as early as next year. However, the details are not yet clear to understand what impact this could have on the day-to-day use of cryptocurrencies in the EU.
