What’s happening?
In July 2014, the European Banking Authority (EBA) published a report that identified 70 potential risks to using virtual currencies such as Bitcoin, including dangers for end-users and market participants and the facilitation of financial crime. The EBA proposed creating a regulatory regime, but noted that it would need a “substantial body of regulation”, including governance and capital requirements, the segregation of client accounts, and a new concept of “scheme governing authorities” responsible for the integrity of virtual currency infrastructures such as the coding protocol and transaction ledger. Since it will take time to formulate this regime, the EBA instructed financial institutions not to buy, hold or sell virtual currencies in the interim.
