The head of the European Banking Authority has no intention at the moment to regulate cryptocurrency.
EBA chairperson Andrea Enria said instead of regulation a “nuance approach” is the better way to deal with cryptocurrency concerns.
In a recent speech, Enria said instead of regulation, cryptocurrencies should be subject to full AML rules, consumers should be warned about the risks involved in investing in bitcoin and others, and financial institutions should be barred from buying, selling and holding them.
EBA since 2014 has already opposed regulating cryptocurrency.
A week after his speech, EBA released its own fintech roadmap which shows steps that similar services are regulated in a consistent way across the EU.
Enria explained that while it is correct to government will watch closely fintech firms and the services it is not correct that we treat these companies similar as banks, which provide liquidity, debit and credit.
He said the public need to realize that if these firms are treated as banks it could risk lending credibility via regulation to firms that do not deserve it, legitimizing activities that could carry high risk and generating an expectation of public protection in case something goes wrong.
Instead of regulation, Enria said we allow fintech firms to innovate through sandboxes.
He said EBA will also look into setting best practice guidelines to ensure consistency in how these work across the EU.
Moreover, Enria said his agency will also put up fintech knowledge hub, to facilitate information exchange between different authorities and market participants.