European Union officials and governments are becoming wary and skeptical of the growing cryptocurrency market, specifically bitcoin. Concerns that the digital currency is being used for drug trafficking, money laundering, and terrorism are increasing. The French Finance Minister Bruno Le Maire recently claimed that the cryptocurrency could hide such activities. He also expressed concerns for those investing and betting on bitcoin in the long run saying that “there is an obvious speculative risk” . Le Maire hopes the G20 countries, including powerhouses such as the US, China, Germany and the U.K., will agree with the consensus that bitcoin regulations are needed, and will take action in the upcoming months. The Italian government stated that it also wants to regulate the currency with new rules. The British Treasury is hoping to adopt a more preventive approach, explaining that the risks of money laundering and cybercrime are still uncertain and unproven, but could grow in the future.
The idea that bitcoin is used for cybercrime mostly stems from previous years, when the dark web marketplace Silk Road was popular. However, it is clear nowadays that there is a reversal, and bitcoin is growing more popular as a store of value, a digital currency, and a financial asset. The bitcoin community firmly believes in mass adoption and it is no longer far fetched to think it will occur within the next five to ten years.
What does this mean for bitcoin in the future?
As of now, it is unclear what the situation in the EU will be in the future. Many officials are trying to regulate the currency, but others are denying that claim. Pierre Moscovici, the EU Commissioner for economic, financial affairs, taxation and customs, declared that the organization does not consider bitcoin “as an alternative currency” and that at this stage, it has no intention of intervening. In September, the Central Bank of Finland released a report stating that “there is no need to regulate [bitcoin]” .
It is almost certain that in order to reach mass adoption, bitcoin will have to face tough regulations from governments and financial organizations. However, the question is how long will it take and more importantly, how will these governments and lawmakers be able to monitor a decentralized currency that has proven to be out of reach from banks and financial organizations in the past.
TLDR: European Union governments and lawmakers are looking into regulating cryptocurrencies as they are afraid they might lead to cybercrime and money laundering activities.