European Commission Vice-President Praises Cryptocurrencies and ICO Funding Model
Vladis Dombrovskis, the Vice President of the European Commission, recently praised the ICO funding model and stated that cryptocurrencies are here to stay. He added that the Council developed a positive view of the tech.
Vladis Dombrovskis, the Vice President of the European Commission has said that the commission will have to conclude on a regulatory assessment for the governance of digital assets this year because they are “here to stay”.
Cryptocurrencies grow despite market turbulence
Vice-President of the EU, Vladis Dombrovskis made this remark following the meeting that saw the 28 EU finance ministers meet in Vienna, Austria on September 7, to discuss new rules for the nascent cryptocurrency industry.
In his opening remarks, Dombrovskis said that the Council has developed a broadly positive view of cryptocurrencies and ICOs, seeing their growth in the face of market turbulence as proof of their viability.
Vladis Dombrovskis is quoted saying:
“We see that crypto-assets are here to stay. Despite the recent turbulence, this market continues to grow. In particular initial coin offerings, or ICOs, we see they have the potential to emerge as a viable form of alternative financing. Already last year, ICOs helped raise over 6 billion dollars in funding and this year this figure will be substantially bigger.”
This is not Dombrovskis’s first positive remarks on ICOs. In February this year, he referred to ICOs as an innovative fundraising method.
Dombrovskis believes that more work needs to be done by the council and that regulators would need to take more of a case-by-case approach to govern specific token projects.
The crypto industry needs regulations
Vladis Dombrovskis, who oversees Financial Stability, Financial Services, and Capital Markets Union at the EU has gone on record to call for developing a unified regulatory framework for digital assets in Europe.
According to Vladis Dombrovskis the European Commission will have to conclude on a regulatory assessment for the governance of digital assets this year because they are “here to stay”.
CCN reported in December last year that Dombrovskis wrote letters to the:
- The European Banking Authority (EBA),
- The European Insurance and Occupational Pensions Authority (EIOPA), and
- The European Securities and Markets Authority (ESMA).
His letters were to urge the organizations to warn Bitcoin adopters of the risks in investing in the cryptocurrencies.
On Friday, Dombrovskis reemphasized his concerns about cryptocurrency. He argued that there are not only risks for investment protection and market security, but also risks of money laundering, potential fraud, and hacking.
Dombrovskis believes that it is necessary for the EU to keep on monitoring developments in the crypto space in collaboration with the Financial Stability Board and the G20.
Difficulty in regulating cryptocurrencies
Dombrovskis noted that a major challenge regulators face with regulating digital assets is knowing how to properly categorize them, and determine whether to apply existing EU financial rules to them or to develop new rules.
Regardless of this letdown, he stated that the European Council is working together with European Supervisory Authorities on a crypto asset regulatory mapping project to provide answers to these questions.
According to Dombrovskis, the EU has already expanded the scope of existing AML and anti-terror financing legislation to cover crypto exchanges and crypto wallet providers.