Want to Trade Bitcoin? ForexNews Recommmends
Bitcoin fell as the European Banking Authority warned financial institutions from engaging in virtual currency deals until new rules are written up. The crypto opened the day at $632.98, then proceeded to fall to a low of $622.45 on BTC-E. From here, BTC/USD rallied 10 points to hit $632. Buying one piece of the virtual currency will cost you $630.50 on BTC-E compared to $629.77 on BitStamp.
The European Banking Authority recommended that European banks and financial institutions have Bitcoin exchanges follow financial requirements like KYC (Know Your Customer) and AML (Anti-Money Laundering). Most major BTC exchanged in Europe (BitStamp, Kraken etc) already comply with the rules.
But the EBA went much further than this. The Authority suggested that in order to address ‘’risk driver a) – i.e. that anyone, including criminals, can anonymously create a VC [Virtual Currency] without being held responsible for any changes made to the VC protocol, or other core elements of the VC scheme by others at a later stage – the creation of an entity that is accountable to the regulator would need to be a mandatory requirement for a VC scheme to be regulated as a financial service and for it to be allowed to interact with existing regulated financial services.’’
Here more about the SGA: ‘’The entity would be called the Scheme Governance Authority, which is a non-governmental entity that establishes and governs the rules for the use of a particular VC scheme. It is a legal person, and is responsible for maintaining the integrity of the central transaction ledger, the protocol, and any other core functional component of the scheme. The scheme governance authority would be required to comply with regulatory and supervisory requirements of various kinds to mitigate identified risks.’’
You can read the rest of the large PDF file here.
The EBA’s request for the creation of a central governing authority will not go well in bitcoin land. One of the key tenants behind bitcoin is its decentralized nature. The European Banking Authority is a regulatory agency of the European Union. It was formed in 2011 and is headquartered in London, England. The EBA has the power to overrule national regulators if they fail to properly regulate their banks.
Get our free guide to bitcoin trading here.
July 04, 2014 at 09:52AM
Latest Bitcoin News | BTC/LTC Robot | Mining ASICS | BTC Debit Card
