Brussels calls for better rules to cope with the volatility of bitcoin

The price of Bitcoin over a year and when the fall on 19 December (Photo Laurence CHU. AFP)

A vice-president of the european Commission, Valdis Dombrovskis, has urged Wednesday the authorities of european regulatory to modernize urgently the financial rules to cope with the volatility of bitcoin.

The bitcoin, the virtual currency that burst onto the international financial stage in 2017, is passed of approximately $ 1,000 in January to more than $ 16,000 in mid-December, a steep climb raising fears of a bubble, even in the financial community is accustomed to speculation and volatility.

“The developments in the bitcoin these last few weeks will require our attention”, warned Mr Dombrovskis, in a letter addressed to the leaders of the three financial regulators of the EU. These three leaders are Andrea Enria of the European Banking Authority (EBA), Steven Maijoord of the European securities and Markets Authority (ESMA) and Gabriel Bernardino of the european insurance and occupational pensions (EIOPA).

Lse agencies of regulations that need to develop plans “for urgent (…) in the light of recent developments in the market,” he wrote in this letter, of which AFP has obtained a copy.

Mr. Dombrovskis, former Latvian Prime minister, has also urged regulators “to work more to better evaluate and improve the regulatory framework for the bitcoin and crypto-currencies”.

“There are obvious risks to investors and consumers linked to the volatility, including the risk of a complete loss of its investment, and in the manipulation of the market”, he argued.

The position of the european Commission is in line with those of experts who have warned against the spectacular rise of this virtual currency, worrying about this bubble.

Janet Yellen, the chairwoman of the american central bank (Fed), believes that bitcoin “is not an official currency” and urged financial institutions to ensure that their transactions in bitcoins do not violate the laws on money laundering.

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