ECB to Increase Online and Offline Efforts to Monitor Crypto Trade and Related Activities
At a time when regulators across the globe are taking steps to tighten their grips on virtual currencies, the European Central Bank (ECB) has also decided to follow the trend. The ECB will ramp up its surveillance efforts to monitor crypto activities in the region. The apex banking regulatory body of the European Union has released a report, titled ‘Understanding the Crypto-asset Phenomenon, Its Risks, And Measurement Issues.’
In the report, the ECB mentions that it has been analyzing the crypto space, in order to ascertain the potential impact on monetary policies, and the threats that the cryptocurrencies pose for market infrastructure financial system stability. To achieve this, the ECB requires to monitor the transactions, and collect data and insights for better understanding. ECB largely depends on the publicly available data of crypto transactions for monitoring the activities to a great extent.
A great deal of aggregated information is available on public websites, which can provide, for instance, metrics for crypto-asset networks, estimates of market capitalisation, prices and trading volumes on crypto-exchanges and the amount of funds raised when a crypto-asset is offered to the public in “initial coin offerings” (ICOs).
While this might be an important stop from the administration’s perspective, it isn’t encouraging for crypto users, companies, and traders. Privacy, anonymity, and the least intervention from the establishment are the key reasons for the success of crypto. Moreover, intervention from regulators has caused a big hit to ease of use in various cases.
Europe, interestingly, has been more than open towards cryptocurrencies, which proved to be quite encouraging for the industry. However, since US President Donald Trump accused crypto of being used for illegal activities like drug trafficking and money laundering, Europe seems to be shifting against the industry. While lawmakers in the US have proposed a ban on crypto, Europe is willing to impose heavy regulations.