Amsterdam recently hosted the Bitcoin 2014 conference, which included a session on anti-money laundering on transparent networks. Dirk Haubrich of the European Banking Authority (EBA) outlined some concerns that the EBA has on digital currencies generally, including bitcoin.
Haubrich said that the EBA is concerned about:In his initial statement Haubrich sketched the concerns of the EBA with respect to:
– the use of digital currencies to transfer the proceeds of crime and act as money transmission;
– the fact that anonymity is an obstacle in linking transactions with people;
– seizing assets and restoring or undoing criminal or illegitimate transfers;
– the emergence of hawalla-like new channels through which international transfers may take place to countries that are on the FATF sanction list;
– the use of those currencies by terrorists and criminals;
– the integrity of creators of digital currencies.
Role of the EBA
He also said that the EBA has a specific remit in the area of consumer protection and financial innovation. It is from this perspective that the EBA issued its warning on virtual currencies in December 2013. A cross-sectoral working group of European supervisors is now looking at whether to further regulate virtual currencies.
When questioned about the major challenges for digital currencies, Haubrich also cited anonymity and IT security as areas of concern. Our overall impression was that further regulation seems more likely than a continuation of the current hands-off approach.
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