Germany has joined European pressure to regulate Bitcoin for fear of being used by money launderers, drug traffickers and terrorists.
The German Minister of Finance has welcomed the proposal of French Finance Minister Bruno Le Maire to ask the Group of Twenty to consider a joint Bitcoin regulation, reports Bloomberg. The Italian Government shares these concerns and is open to regulation, while the European Union supports the Bitcoin rules that the United Kingdom aspires to.
Germany cites speculative risks
The German Ministry of Finance said it makes sense to consider the speculative risks of virtual currencies and their impact on the international financial system.
The ministry said the upcoming meeting of finance ministers and central bank governors of the G-20 would be a good time to discuss the issue.
Bitcoin futures raise concerns
Concern in Europe has increased following the Bitcoin futures launched by the CME group on Sunday, which came one week after the introduction of similar derivatives by Cboe Global Markets.
Germany is Europe’s largest economy, and the Ministry of Finance closely tracks developments in the financial markets, according to the ministry, including current developments. During a weekend interview on the LCI channel in France, Le Maire announced the previously expressed concerns, while Bitcoin returned to traditional financing.
He said he does not like Bitcoin because it can hide terrorism and money laundering. He is also worried that this is a speculative risk for people trying to save money. Pier Carlo Padoan, Italian Finance Minister, said he would discuss the mayor’s proposal, said a government official who did not want to be publicly identified.
The legislator is strengthening the rules against money laundering
On Friday, lawmakers and EU officials agreed to the need to revise EU anti-money laundering rules and expanded the scope to companies that oversee and transfer virtual currencies, according to the European Commission. Businesses need to identify their customers and report suspicious activity.
US Treasury Secretary Stephen Barclay told lawmakers in November that the regulation of money laundering and terrorist financing would be subject to virtual forex trading platforms and portfolio providers through new rules. The UK government has stated that digital currencies can facilitate cybercrime. The Treasury also noted that there is little evidence that digital currencies are being used to launder money, but this activity is expected to increase. Therefore, the proposed rules would be useful.
Read also: Bitcoin has our increased attention: Head of the EU Financial Regulation
Economists distrust Bitcoin
Joseph Stiglitz, Nobel Prize winner for economics, said last month that Bitcoin should be banned and that it does not fulfill a socially useful function. Robert Shiller, also a winner of the economy, said the Bitcoin attraction is a mysterious story that attracts people who want to thwart the system.
Financial supervision in Germany warned consumers of cryptocurrency risks last month. The supervisor said that regulation at the national level is not sufficient because of the global reach of digital currencies.