EU Banking Regulator Cautions Against Over-Regulation of Cryptocurrencies

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On Friday, the European Union’s top banking regulator cautioned against government imposition of tight regulatory controls for cryptocurrencies. European Banking Authority (EBA) chief executive Andrea Enria suggested that governments should instead move to block government-regulated financial entities like banks from selling or holding digital currency.

During a speech delivered in Copenhagen, Enria said:

“Recently, several central banks have argued that cryptocurrencies lack the institutional back-up of a central bank and cannot fulfil the traditional functions of money . . . I am yet to be convinced that this is a sufficiently strong argument to attract cryptocurrencies under the full scope of regulation.”

According to reporting from the Financial Times, Enria asserted that fintech companies should also be free from excessive regulation, as long as they are not providing the same type of credit, debit, and liquidity functions as their rivals in the banking industry. The EBA head advised a more collective EU-approach to such regulation to ensure that the economic bloc could continue to compete with countries like the United States and China.

Mr. Enria’s suggestions stand in stark contrast to comments made by many other central bankers in recent months. For example, Bank of England governor Mark Carney last week called for greater regulation of the digital currency industry.

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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