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European Banks Instructed To Avoid Bitcoin

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The European Banking Commission has spoken, and it seems rules are coming to bitcoin in the EU. Until those rules are out there, the bloc’s banking regulator has instructed lenders to shun digital currency.

"It’s imperative to move quickly on this issue,” Chantal Hughes, a spokeswoman for Financial Services Commissioner Michel Barnier, said in an e-mail, reports Bloomberg. “The potential for money laundering and terrorist financing is too serious to ignore."

European banks have been instructed not to buy, hold or sell virtual currencies until such time as regulators develop safeguards to assure their integrity.  So far, the banking authority has identified over 70 risks linked to digital currency, including identity theft and hacked trading platforms.

"Regulators have become alert to the potential for fraud and disruption,” Richard Reid, a research fellow for finance and regulation at the University of Dundee told thee source. “Such attention from regulators is bound to curb the growth of markets such as Bitcoin."

In the wake of the limitation, the price of bitcoin has fallen to around $621 two hours before the opening of trading in New York, according to the PYMNTS Bitcoin Index.

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