European Central Bank executive board member Fabio Panetta said lawmakers across the world must decide how to regulate cryptocurrencies based on potential risks.
In a written statement for a speech to Columbia University on Monday, Panetta said global policymakers had made some progress in addressing regulatory frameworks on digital assets, but \u201cnot swiftly enough to keep pace with the emerging challenges.\u201d
According to the ECB official, the world needs crypto regulated based on Anti-Money Laundering and Countering the Financing of Terrorism rules of the Financial Action Task Force, strengthening public disclosure and reporting on regulatory compliance from the industry, and setting up \u201cstrict transparency requirements\u201d and \u201cstandards of conduct.\u201d
One of Panetta\u2019s chief concerns seemed to be how the central bank and lawmakers address the taxation of crypto assets, describing current requirements as \u201cminimal\u201d and \u201cvery difficult to identify tax-relevant activities.\u201d The ECB official proposed taxing crypto assets based on proof-of-work at a higher rate than other financial instruments based on \u201cnegative externalities that lead to sunk costs for society, such as high pollution.\u201d
\u201cWe should bring taxation on crypto-assets into line with the taxation of other instruments and aim for alignment across jurisdictions, given the global nature of the crypto market,\u201d said Panetta. \u201cThe introduction of reporting obligations for transactions above certain thresholds, as just recently proposed by the Organization for Economic Co-operation and Development (OECD), would enhance transparency and combat tax evasion.\u201d
According to Panetta, Europe is \u201cleading the way\u201d in bringing cryptocurrencies into its regulatory purview, while the United States is working to supervise crypto service providers over perceived risks. He pointed to the Regulation of Markets in Crypto-Assets, or MiCA, as a step toward creating a \u201charmonized European approach\u201d to crypto as well as the global authority Financial Stability Board cooperating with other financial regulators.
\u201cWe need to make coordinated efforts at the global level to bring crypto-assets into the regulatory purview. And we need to ensure that they are subject to standards in line with those applied to the financial system […] We should make faster progress if we want to ensure that crypto-assets do not trigger a lawless frenzy of risk-taking.\u201d
The ECB has been working on the development of a central bank digital currency, with legislation on a digital euro expected in 2023. ECB president Christine Lagarde has previously hinted the central bank could roll out the digital currency by 2025.<\/p>\n","protected":false},"excerpt":{"rendered":"
European Central Bank executive board member Fabio Panetta said lawmakers across the world must decide how to regulate cryptocurrencies based on potential risks.In a written statement for a speech to Columbia University on Monday, Panetta said global policymakers had made some progress in addressing regulatory frameworks on digital assets, but \u201cnot swiftly enough to keep …<\/p>\n","protected":false},"author":13,"featured_media":32197,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[40,36],"tags":[6903,6923,7499],"class_list":["post-64412","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-cryptocurrencies","category-market-updates","tag-cryptocurrencies","tag-ecb","tag-regulation-crypto"],"_links":{"self":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/64412","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/comments?post=64412"}],"version-history":[{"count":3,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/64412\/revisions"}],"predecessor-version":[{"id":64418,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/64412\/revisions\/64418"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media\/32197"}],"wp:attachment":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media?parent=64412"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/categories?post=64412"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/tags?post=64412"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}