France seems to have taken the initiative in Europe on cryptocurrency regulations. Attempting to clamp down on reports of money laundering and tax evasion, the government is moving ahead.
This is something that has been on the mind of the French authorities for some time as well. For example, there were reports last month that the French Finance minister wanted to discuss Bitcoin legislation at the G20.
It has been the contention of the Finance minister, Bruno Le Maire, that Bitcoin is being used by terrorists and tax evaders alike. He has also given his own opinion on the matter before saying
I don’t like it. It can hide activities such as drug trafficking and terrorism
New Regulatory Frameworks
As such, the Finance minister has directed the head of the Central bank to come up some sort of framework wherein sensible regulations can be implemented. He also wanted to central bank to look into reports that there may have been price manipulation.
This is indeed a view that has been shared by many in the government of Macron. The president himself has taken a dim view to cryptocurrencies which is shame given his drive to rejuvenate the French economy.
Moreover, it appears as if France is spending a great deal of funds on rolling out innovative blockchain projects. They were looking at the numerous ways in which public services on the blockchain could improve government deliverability.
European Wide Drive
The French are not alone in their endeavours to implement strict regulations on Bitcoin and cryptocurrencies. There are many other countries in the EU that would also like to see some control and regulation put in place.
For example, there have been reports that the EU is thinking of instituting a Bitcoin database in order to keep a tab on users who are buying the coins at European exchanges.
You also have the numerous grumblings that are coming out of the ECB on the topic of Bitcoin. While their counterparts in the US have launched Bitcoin futures on two different exchanges, the ECB has claimed that they are a threat to the banking system.
While it is known that Bitcoin and cryptocurrencies are used on the darkweb, the effectiveness of law enforcement in the anonymous markets has brought a great deal of them down. Moreover, the great deal of Bitcoin users are using their holdings honestly.
Instead of imposing more regulations on the traders, the government can turn to innovative technology to help in their cause. For example, they could use blockchain audits to track crime and other nefarious activity on the blockchain.
Other Countries Adapt
While the EU, led by French efforts, is trying to place a stranglehold on Bitcoin activity, other countries have embraced the technology and the innovation that comes with it.
In Japan, for example, the goverment is actively encouraing cryptocurrency exchanges to move to the country. They are no doubt making a great deal of money from this as well as the exchanges and Bitcoin businesses will bring additional tax revenues.
Exactly how the regulations are likely to pan out in France is hard to tell. There have been mixed messages from the authorities in that country and traders have to rely on a number of statements presented as fact.
Hence, the cryptocurrency markets are likely to be increasingly volatile over the coming months as more of these statements spread the inevitable FUD.