Consistent losses in the cryptocurrency sector have forced some investors to adopt a grim point of view about the state of the market. However, a new development from the European Union is reassuring crypto enthusiasts that the situation is still salvageable.
The EU has confirmed that it is in no hurry to create crypto regulations. This makes traders worldwide take a sigh of relief. As time passes, it is becoming clear that the EU doesn’t view digital currencies as an imminent threat to its financial system and won’t take decisions in haste.
No Rush for Regulations
The EU finance ministers who gathered in Vienna agreed that there is no pressing need to create crypto regulations in the region. The ministers also agreed that they will wait for the outcome of an analysis by the authorities before deciding which steps they must take to regulate the market.
Speaking to the reporters about the ministers’ view on digital currencies, Irish Finance Minister Paschal Donohoe said:
“The EU will be acting carefully in this area.”
Officials have also reported that the ministers agreed with the observation of the Financial Stability Board, which suggested earlier this year that digital currencies don’t pose a threat to the European financial system.
EU policymakers support transparency in the crypto market, but they haven’t introduced any regulations that could help in safeguarding investors from significant risks posed by the market. The crypto territory is no stranger to fraud and pump and dump schemes.
What Is EU Waiting For?
In a report prepared for the Vienna meeting, Bruegel, a Brussels-based think tank, wrote that limiting cryptocurrency exposure in European financial institutions would be “sensible.” The report also says that experimenting with some national solutions will be useful before reaching a standard single policy.
German Finance Minister Olaf Scholz said that the Vienna meeting helped ensure that everyone understood the challenges of cryptocurrencies and that rule makers are “put in a position in which they’re able to act.” He added:
“It’s obvious that we shouldn’t wait too long with that.”
In February this year, the European Central Bank’s chief supervisor told CNBC in an interview that cryptocurrency isn’t a priority for the institution. She said:
“It’s not exactly very high on our to-do list.”
However, authorities are keeping an eye on the latest developments in the crypto market.