04 September 2015

European banks told to avoid bitcoin

04 July 2014  |  8452 views  |  0 bitcoins

Europe's financial institutions should steer clear of virtual currencies such as bitcoin until a regulatory regime is in place, the European Banking Authority (EBA) has warned.

In an opinion document for the EU Council, EC and European Parliament, the EBA argues that virtual currencies could bring some important benefits, such as faster and cheaper transactions and greater financial inclusion.

However, it also identifies more than 70 risks that, taken together, "outweigh the benefits". To address these risks would require a "substantial body of regulation".

New rules would be needed to cover governance requirements for several market participants, the segregation of client accounts, capital requirements and, most importantly, the creation of 'scheme governing authorities' accountable for the integrity of a particular virtual currency scheme and its key components, including its protocol and transaction ledger.

Until this regulation is put in place, national watchdogs should "discourage credit institutions, payment institutions and e-money institutions from buying, holding, or selling virtual currencies," advises the EBA.

Read the full document here:
» Download the document now 619.8 kb (PDF File)

Comments: (0)

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board, sign up now.

Related blogs

Create a blog about this story (membership required)

Related stories

24 June, 2014
04 June, 2014
20 May, 2014
10 April, 2014
12 March, 2014
05 March, 2014
03 March, 2014

Related company news

Your browser is unable to support Flash files.

Who is commenting?

Finextra Member Commented on: HSBC to rebrand Britsh...
Finextra Member Commented on: Zapp to use behavioura...

Top topics

Most viewed Most shared
Third of Brits expect day-to-day mobile pa...
8368 views comments | 39 tweets | 15 linkedin
Payments UK sets out vision for 'world cla...
6928 views comments | 17 tweets | 10 linkedin
Swedish mPOS firm iZettle raises EUR60m fo...
6233 views comments | 13 tweets | 8 linkedin
UK boosts contactless limit to £30
5729 views comments | 31 tweets | 20 linkedin
PayPal rolls out personalised URLs for P2P...
5641 views comments | 34 tweets | 18 linkedin

Featured job

£95,000 basic, £170,000 OTE

Find your next job