After issuing a warning a second time this year, the Deutsche Bundesbank board member Carl-Ludwig Thiele calls for regulation on Bitcoin as according to him currently there are no regulatory framework on the digital currencies. He said that as digital currencies like Bitcoin are a relatively recent phenomenon lack of regulation is obvious.
He however believes that as it becomes more popular, there would be some sort of regulation on the part of the government. Talking to media professionals, Mr. Thiele said that the Bundesbank’s Executive Board would like to see an appropriate way of dealing with the digital currencies like Bitcoin internationally.
According to Carl-Ludwig Thiele, the existing regulations on the digital currency are not in harmony as different states have different laws, or different ways of interpreting and applying them. Therefore, in his opinion it is important for EU regulators to envisage one practical and popular regulatory framework towards the digital currencies like Bitcoin.
However, as Carl-Ludwig Thiele admits that discussion about digital currencies among EU regulators is still at nascent stage, he cannot comment on it. He also added that the European Banking Authority has formed a workgroup tasked with looking at digital currencies. The group will come up with any practical solution for digital currencies later.
Deutsche Bundesbank Issued Warning Twice
The warning and call for regulation on Bitcoin is not new for Carl-Ludwig Thiele as earlier in the month of January this year, he issued a similar warning to Bitcoin users. His reservations about Bitcoin and other digital currencies are obvious as he thinks that these are extremely volatile and investors/users have higher likelihood of losing their money.
According to Mr. Thiele though Bitcoin users rely often that Internet payments with Bitcoin is cheaper than an international bank transfer or paying with credit card, they forget that the price of Bitcoins fluctuates a lot and that is a major concern among other things. The fluctuating prices of Bitcoin in his view incur huge losses to customers when compared with other methods.
All the concerned agencies around the world are taking cue from the collapse of Mt. Gox which led to the huge losses from investors. Earlier the last year, some Ponzi scheme and Silk Road sort of incidents influenced the policy makers, this year Mt Gox and other companies show the urgent need for greater oversight of virtual currencies.
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