Lord Hill expected to discuss digital currencies during his appearance in the European Parliament

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Lord Hill expected to discuss digital currencies during his appearance in the European Parliament

According to various local reports, the European Commission which has played an active role in discussions of the EU’s task force on virtual currencies is expected to provide another hearing. The reports say that the European Parliament may quiz several nominees for European Commission posts this week, including Britain’s Lord Jonathan Hill.

It is reported that Jonathan Hill is scheduled to appear before parliament and expected to discuss digital currencies during his appearance. The European Commission’s views are important as the European Banking Authority (EBA) had earlier issued warning against the use of Bitcoin and other similar digital currencies.

According Lord Hill the EBA helped identify the main risks associated with cryptocurrencies and put forth a number of recommendations. Explaining everything he said that this resulted in an Opinion of the EBA that recommended that EU legislators consider declaring market participants at the direct interface between conventional and VCs.

The EBA according to him recommended that virtual currency exchange platforms should become ‘obliged entities’ under the EU Anti Money Laundering Directive. The banking body believes that when these are subject to its anti-money laundering (AML) and counter terrorist financing (CFT) requirements, the risk will be reduced significantly.

It’s not that Lord Hill, the commissioner-designate for the Financial Stability, Financial Services and Capital Markets Union portfolio, is going to attend the first of sort meeting. In fact, he has gone through similar meeting earlier that took place last week wherein he and another designate were posed a number of questions.

A Balance is a Must between Safety and Innovation, Says Lord Hill

Then several lawmakers and committees, submitted by Martin Schulz, the President of the European Parliament asked several pointed questions on the digital currencies. In fact, Lord Hill was asked a further set of supplementary questions to elaborate his position on the matter and to outline his recommendations for digital currencies like Bitcoin, Litecoin and others.

Lord Hill had even responded to the pointed questions from the lawmakers wherein it was pointed out that Bitcoin is just one of more than 200 virtual currencies. According to him, these virtual currencies indicate his belief that there is a need to find a balance between safety and innovation.

He believes that cryptocurrencies can often bring “faster and cheaper” means of payments than traditional bank transfers; however, according to him they suffer from a lack of regulation, security and capital requirements that currently apply to other payment services providers, thus creating prudential risks.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com