The French finance minister has called for tough new regulations on cryptocurrencies to stop them being used to dodge tax or finance terrorism and other crimes.
In a speech today, Bruno Le Maire said he has ordered a former central bank chief to draft potential new rules, warning against the ‘risks of speculation and possible financial manipulation’ linked to Bitcoin and other such currencies.
Le Maire’s office couldn’t provide details of what the rules could contain. Regulators worldwide are taking a harder stance on the currencies as their values have skyrocketed.
He also said President Emmanuel Macron’s government will ‘not cede anything’ as it presses internet giants to stop using tax havens and wants Europe to be more aggressive to compete with the U.S. and China.
A director at Germany’s central bank said any attempt to regulate cryptocurrencies such as Bitcoin must be on a global scale as national or regional rules would be hard to enforce on a virtual, borderless community.
National authorities across the globe, and particularly in Asia, have attempted to put the brakes on a global boom in the trading of Bitcoin and other cryptocurrencies a form of digital money created and maintained by its users.
But Joachim Wuermeling, a member of the board of Germany’s Bundesbank, said national rules may struggle to contain a global phenomenon. ‘Effective regulation of virtual currencies would therefore only be achievable through the greatest possible international cooperation because the regulatory power of nation-states is obviously limited,’ Wuermeling told an event in Frankfurt.
Chinese regulators have banned initial coin offerings, shut down local cryptocurrency trading exchanges and limited bitcoin mining – but activity has continued through alternative channels in China despite the crackdown.
South Korea, where speculation on cryptocurrencies is also rife, is also working on plans to ban virtual coin exchanges. European Union states and legislators agreed last month on stricter rules to prevent money laundering and terrorism financing on exchange platforms for bitcoin and other virtual currencies.