0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

EU shifts attitude to virtual currencies following ECB fear

18 October 2016

The mood music in Brussels has taken a turn for the worse on virtual currencies.

On 5 July 2016, the European Commission published a bold plan to bring virtual currency exchange platforms and custodian wallet providers under the 4th Anti-Money Laundering Directive. The reception in the virtual currency community was notably mixed. Some thought increased regulation would bring greater credibility to virtual currencies and would be the first step in them becoming an accepted part of the financial landscape. Others believed regulation would in time be proved to be unnecessary, unhelpful or unenforceable, and was therefore not worth engaging with. In any event, the general demeanour of the European Commission appeared to be one of genuine concern as to harnessing the potential of virtual currencies for good rather than evil, as opposed to providing blunt opposition.

However, last week the ECB issued its own opinion on the proposed directive and it contains a hammer blow to virtual currencies (although not one that will surprise aficionados of monetary economics):

“…the reliance of economic actors on virtual currency units, if substantially increased in the future, could in principle affect the central banks’ control over the supply of money…”

This insight comes along with the recommendation that “…Union legislative bodies should… take care not to appear to promote the use of privately established digital currencies.”

In other words, the ECB is being surprisingly frank about virtual currencies posing a threat to fiat currencies, and it does not want the European Commission pouring petrol on the fire.

related opinions

Marriott International: a look behind the ICO’s £99m fine and what this means for corporate acquisitions

Last month, the Information Commissioner’s Office (ICO) announced notice of its intention to fine (NOI) Marriott International, Inc. £99m for infringements of the GDPR.

View blog

SFO fail to secure individual criminal convictions following Deferred Prosecution Agreement

On 16 July 2019 the Serious Fraud Office released details of the Deferred Prosecution Agreement reached with Sarclad Ltd in July 2016.

View blog

Supreme Court backs employers seeking to enforce restrictive covenants: Tillman v Egon Zehnder Ltd

The Supreme Court in Tillman v Egon Zehnder Ltd has determined that where post-termination restrictive covenants (i.e. “non-compete” clauses) in employment contracts go further than reasonably necessary to protect an employer’s business interests, it can apply the ‘blue pencil test,’ severing the offending words and leaving the remaining enforceable clause in place.

View blog

Discount rate remains negative

The much anticipated revision of the discount rate has arrived with the Lord Chancellor, David Gauke, announcing that it will be fixed at -0.25%.

View blog

mailing list sign up

Select which mailings you would like to receive from us.

Sign up