EU Draft Report Calls for Digital Currency Task Force in Europe

A new draft report on digital currencies authored by Jakob von Weizsäcker, EU Parliament member on the Committee on Economic and Monetary Affairs, calls for the formation of a “horizontal Task Force”, which will be charged with examining the potential challenges of distributed ledger-based applications.

The report also recommends that online crypto-wallet providers to be placed in the same category as standard virtual currency exchanges.

“Welcomes the Commission’s suggestions for including VC exchange platforms in the AMLD; recommends further extending the scope to custodian wallet providers“

Weizsäcker also warns of the risks of a “light-touch regulation” approach, saying that EU legislators need to enact “rapid and forceful regulatory measures”, which will safeguard businesses and consumers as virtual currency usage expands within Europe.

“As with the opportunities, the risks related to VCs and DLT will only emerge more clearly as their use becomes more widespread.”

While the report uses strong language to highlight the necessity of adequate regulations and safeguards, an entire page is dedicated to outlining the positive aspects of virtual currencies. Weizsäcker writes that digital currencies have the potential to lower transaction costs to below 1%, a big improvement compared to the traditional 2%-4% fee associated with bank transfers.

According to the report, up to “EUR 20 billion” in cross-border remittance fees can be eliminated as a result of using virtual currencies.

Weizsäcker also did not fail to mention the application of distributed ledger technology (DLT) beyond the payment industry:

“DLT’s potential to accelerate, decentralise, automate and standardise data-driven processes has the potential fundamentally to alter the way in which assets are transferred and records are kept, with implications for both the private and the public sector,“

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