European Union – Policy Summary for Regulation of Virtual Currency

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EUROPEAN COMMISSION
COM(2016) 50/2
Published in February 2016
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on an Action Plan for strengthening the fight against terrorist financing

“Virtual currency exchange platforms: There is a risk that virtual currency transfers may be used by terrorist organisations to conceal transfers, as transactions with virtual currencies are recorded, but there is no reporting mechanism equivalent to that found in the mainstream banking system to identify suspicious activity. Virtual currencies are currently not regulated at EU level. As a first step the Commission will propose to bring anonymous currency exchanges under the control of competent authorities by extending the scope of the AMLD to include virtual currency exchange platforms, and have them supervised under Anti-Money Laundering / countering terrorist financing legislation at national level. In addition, applying the licensing and supervision rules of the Payment Services Directive (PSD) to virtual currency exchange platforms would promote a better control and understanding of the market. The Commission will examine this option further. The Commission will also examine whether to include virtual currency “wallet providers””

European Commission – Press Release – Action Plan
2 February 2016

Fourth Anti-Money Laundering Package adopted in May 2015. Now the “Commission is calling on Member States to commit to do this by the end of 2016″

Also, the Commission is proposing “targeted amendments to the Fourth Anti-Money Laundering Directive at the latest by the end of the second quarter of 2016

Suggested amendment: “to prevent their abuse for money laundering and terrorist financing purposes, the Commission proposes to bring virtual currency exchange platforms under the scope of the Anti-Money Laundering Directive, so that these platforms have to apply customer due diligence controls when exchanging virtual for real currencies, ending the anonymity associated with such exchanges”

European Parliament Report
Committee on Economic and Monetary Affairs – 23 February 2016 on virtual currencies (2016/2007(INI))
Rapporteur: Jakob von Weizsäcker

“Welcomes the Commission’s suggestions for including VC exchange platforms in the AMLD; recommends further extending the scope to custodian wallet providers if and when the use of the VC(s) in question were to become so prevalent that users would no longer routinely need to exchange their VCs into legal tender

Recommends a review of the EU legislation on payments, including PSD and EMD, in light of the new possibilities afforded by new technological developments including VCs and DLT, with a view to further enhancing competition and lowering transaction costs, including by means of enhanced interoperability and possibly also via the promotion of a universal and non-proprietary electronic wallet;

Calls for the creation of a horizontal Task Force DLT (TF DLT) under the leadership of the Commission, in order to provide the necessary technical and regulatory expertise to support the relevant public actors, at both EU and Member State level, in their efforts to ensure a timely and well-informed response to the new opportunities and challenges arising with the introduction of DLT applications; observes that the potential of DLT use and the present investment dynamics justify TF DLT being equipped with a proper budget and being staffed with regulators and external technical experts dedicated crosssectorally to the monitoring of DLT-based applications, identifying standards for best practice, and, where appropriate, recommending regulatory measures and addressing potentially arising consumer protection issues and systemic challenges;

Asks the Commission, on the basis of the findings of TF DLT, to explore the need for a legislative proposal requiring VCs and other DLT scheme actors which do not yet have to comply with suitable standards based on existing regulation to demonstrate whether their scheme: 1. if it is used on a large scale, is designed so as to avoid harming consumers and users; 2. if it is systemic, is safe, is sound and has a dependable governance structure

Other articles:

Article by Oliver Salles from European Parliament January 2016