From May 15th until May 17th, the Bitcoin 2014 conference took place in Amsterdam. One of the break-out sessions was dedicated to the topic of Anti-Money Laundering on Transparent Networks. During this session, Dirk Haubrich of the European Banking Authority (EBA) outlined some of the issues and concerns of the EBA with respect to digital currencies and bitcoin.
In his initial statement Haubrich sketched the concerns of the EBA with respect to:
- the use of digital currencies to transfer the proceeds of crime and act as money transmission,
- the fact that anonimity is a burden to link the transactions to persons,
- seizing assets and restoring or undoing criminal or illegitimate transfers,
- the emergence of a hawalla-like new channel via which international transfers may occur to countries that are on the FATF-sanction list,
- the use of those currencies by terrorists and criminals,
- the integrity of creators of digital currencies.
Role of the EBA
As a part of the discussion, mr Haubrich outlined that the EBA has a specific remit in the area of consumer protection and financial innovation. It is from this perspective that the EBA issued its warning on virtual currencies in December 2013. The question whether or not to further regulate virtual currencies is now being investigated by a cross-sectoral working group of European supervisors. This group will publish its outcome in a couple of months.
When asked to discuss the major challenges for digital currencies, he outlined anonimity and it-security as major topics of concern. In combination with the aforementioned list of concerns, the overall impression was one in which further regulation appeared to be more likely than a continuation of the current hands-off approach.