EBA to Warn the Population of Europe on Cryptocurrencies
The European Banking Authority (or the EBA) has issued an official statement describing the position of the organization in questions considering crypto currencies and their separate examples – the bitcoin.
The European Banking Authority (or the EBA) has issued an official statement describing the position of the organization in questions considering crypto currencies and their separate examples – the bitcoin. The comments can hardly be interpreted positively, as they very much resemble the opinions published by China (People’s Bank of China, Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission), India, New Zealand and one of the EU member-countries – France. The experts believe that the spreading of such attitude might harm the image of the coin, reduce interest and even lead to persecution of users (denying and terminating their private bank accounts).
To be precise the EBA has published a warning on bitcoin, but mostly describes cases on fraud and theft. It does not prohibit any private actions as long as they are not illegal after the laws of the European Union or local rules of the particular member-country. The organization is mainly bothered by the fact that crypto coin users might be harmed as long as they buy, trade or simply hold the virtual money. There is no regulation in the union that might protect them from affairs, frauds or unscrupulous merchants. Also the authorities believe that the exchange ratio – the price for the bitcoin – will not be stable that also might lead to losses of funds, investments and final bankruptcy of a person or company.
The main advantages of the payment method and currency are considered to be the main drawbacks and sources of harm – no bank has funds in bitcoin, no organization regulates and protects the users, the transactions are not to be followed. They also question the technological safety of the system – hackers can easily enter private wallets, the rob them, use for criminal actions.
The next point of interest, of course, is the tax rate and implementation. Everything of the mentioned leads to the possibility of money laundering and unregulated movements of huge amounts. As these actions are described by law online exchange services and platforms might be anytime closed. Such events will definitely lead to losses, too. The wallets and accounts even of the most legitimate users might be terminated. The EBA also warn that tax regulations might differ from country to country. To complete transactions the user should get acquainted with local regulations on these questions.
All the words are a definite sign of some kind of fear from official institutions, governments and single authorities, who are not ready to accept the modern advantages of a virtual currency. The issued statement clearly points out that the doubts, also tries to transfer the uncertainty and anxiety on the society. The most appealing advice is to get as much information on the technology before entering the network to feel safe, trust and reliability. The EBA also refers to bitcoin as to investment methods that one “cannot afford to lose”. The most logical answer should be a question – dear EBA, do You know some other investments a person should be able to afford to lose?