The EU announces a new regulatory regime for cryptomonies, as part of the actions to control the crypto ecosystem. In this post we will explain why these regulations are needed.
States are meant to be able to manage their economic actions, in conjunction with their political functioning. And the concept in which cryptomonies are based escapes from the functioning of countries.
The European Union (EU) is a block of countries that function on two bases. The interconnection between the member countries and the cooperation between the States. Multiple treaties and agreements provide the basis for these ideals. From the Treaty of Schegen, an agreement that abolishes border regulations and allows the free passage of European citizens, to free tariffs.
This allows legal and economic regulations to be applied to a whole block of countries. Thus, guaranteeing a regional effectiveness of the states‘ decision making.
However, crypto currencies are part of a new technological revolution. Advances that leave behind with great advantage the known concepts, such as those of traditional international law. Thus creating a cumbersome process for their regulation. Thus, the EU creates a regulatory regime to deal with this situation with cryptomonies.
Why regulate crypto currencies?
With the emergence of cryptomonies, governments have not been able to avoid seeing crypts as this strange specimen that goes beyond their rational understanding.
Thus, they reject what they do not understand, either out of anxiety or fear of not knowing what the future repercussions of cryptology might be.
The concept of decentralization and the famous Blockchain technology, although they have meant an enormous advance for the users of cryptomonies, for the world leaders they are an abomination. Although, these technological advances have been a great step for humanity. Since they have allowed that unscrupulous and immoral part of human beings to take advantage.
These individuals are the ones in charge of dismissing a technological achievement as amazing as the crypto world. Thus, something that was thought of as a revolutionary idea, promising to change the economic and trading systems as we know them today, has been dismissed by a minority.
Because of their attribute of an almost untraceable currency, encrypted by the users themselves through the Blockchain, and because they do not need to be fully identified, crypto currencies have provided the conditions for illicit and illegal businesses.
Therefore, the regulatory issues of crypto-currencies are mostly related to money laundering, creation of embezzlement companies, embezzlement of funds, sale of arms on the black market and financing of terrorism.
ESMA wants to promote cryptographic regulation
The EU creates a regulatory regime for cryptosystems
The European Union began taking initial steps to approve the first „Hard Regulations“ for digital coins. A regulatory regime was created based on the quest to regulate each active crypto and its operation. In this way, allowing the whole economic sector to be reconciled with this evolution of digital finance.
The vision of the European Union is to become the first region to manage, under the statutes of traditional law, everything related to the crypto ecosystem. Thus, the EU needs this regulatory regime.
„It is an opportunity for Europe to become a creator of global standards, with European companies leading new technologies for digital finance. Valdis Dombrovskis, the bloc’s finance minister, said during a speech at Digital Finance Outreach 2020 earlier this week