Amid fears of a bubble in the cryptocurrency space whose value has skyrocketed in the recent past, EU policymakers are considering to tighten the noose around the cryptocurrencies. The European Central Bank’s deputy governor Jean-Pierre Landau has been appointed to lead an investigative mission on cryptocurrency and how it should be regulated. He has been asked to review whether the EU’s current regulatory framework can be applicable to Bitcoin.
The European Union will present the report/action plan on financial technology this spring. The report will include policy recommendations for the blockchain based cryptocurrencies, cloud-data servicing and online security. The policymakers are not very positive about the cryptocurrencies and have been warning investors and public of risks associated with the huge price volatility.
Mario Draghi, President of European Central Bank said: “Our main worry with these innovations… is the potential fragility with respect to cyber risks. That’s where we really are focusing our work now”.
The UK’s financial regulator Financial Conduct Authority (FCA) has also issued similar warnings in the past, including warnings for ICO. The regulator has warned investors that they carry a good chance of losing their whole stake.