On 22 April 2015 the European securities regulator ESMA released a document that is the result of their 6-month study of the digital currency sector. It consists of a 19-page analysis summarizing their findings and requesting feedback before 21 July 2015.
At a glance there a couple of points worth noting about this publication:
First, ESMA announces its intention to raise awareness and “promote wider understanding of innovative market developments.” It furthermore states:
“It has no pre-conceived view as to whether any other regulatory action is needed and, subject to assessing the information received in response to this call for evidence, has no immediate plans to take any.”
Second, in its attempt to compare and categorize digital currency innovations according to traditional financial concepts, the ESMA findings at times reflects an understanding that is not always accurate or complete.
In March 2015 the U.K. government announced the launch of a £10 million fund to digital currency research alongside a plan to fast track regulations for U.K. businesses in the sector. While the £10 million investment is a promising early step, the clearly articulated agenda to quickly implement regulations (i.e. within 3-5 years) may turn out to be counterproductive.
The speed of digital currency innovation itself makes it likely that government agencies will need to invest significantly more time and resources to build an effective understanding of this strategic sector.
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