With regulators around the world calling for rules and laws governing trading in cryptocurrency, a director of Germany’s central banks said rules have to be on a global scale.
Citing Joachim Wuermeling, a member of the board of Germany’s Bundesbank, Reuters reported that the regulation of cryptocurrencies must be done on a global basis, as national or even regional rules would prove difficult to enforce.
This statement comes after some countries, including China and South Korea, have taken the lead in fighting against the acceptance of digital currencies. China has banned bitcoin trading and initial coin offerings, and South Korea is working on legislation to do the same.
Earlier Monday (Jan. 15), China stepped up its regulation of cryptocurrency trading. Citing people familiar with the matter, Bloomberg reported that China’s regulators are eyeing online platforms and mobile apps that provide customers with exchange-type services.
Since banning trading in cryptocurrencies last year, China has been on the lookout for alternative exchange venues. Chinese regulators want to block people in the country from accessing offshore and homegrown platforms that enable cryptocurrency trading, although the sources didn't specify provide the types of policies China will implement. The government is also going after companies and individuals who enable cryptocurrency trading by providing market making, clearing and settlement services. Small peer-to-peer (P2P) trades aren’t on the government's radar.
According to Wuermeling, trying to regulate the digital currency market on a national level will do little to stop its popularity around the world. “Effective regulation of virtual currencies would therefore only be achievable through the greatest possible international cooperation, because the regulatory power of nation states is obviously limited,” he said at an event in Frankfurt that was covered by Reuters. Wuermeling's comments came as European Union states and regulators signed off on more stringent rules governing cryptocurrencies to prevent terrorist funding and money laundering.