30 March 2015

European banks told to avoid bitcoin

04 July 2014  |  7832 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


Top topics

Most viewed Most shared
Banking has reached a digital tipping poin...
10570 views comments | 56 tweets | 32 linkedin
Europe sets the pace as fintech investment...
5971 views comments | 29 tweets | 20 linkedin
UK online banking fraud losses soar 48%
5174 views comments | 16 tweets | 17 linkedin
Future Money Focus: Mariano Belinky, Santa...
4981 views comments | 12 tweets | 12 linkedin
Google preps Gmail bill payment feature
4943 views comments | 15 tweets | 12 linkedin

Featured job

to 90k base, double OTE, benefits
London, UK

Find your next job