The EU is regularly derided by its legions of detractors and critics for its penchant for stringent (and often excessive) regulatory oversight. Though there maybe some grain of truth in such criticism, the EU MPs have shown time and again that they can arrive at really sensible decisions on important issues. In a recent vote on the issue of evolving financial technologies behind cryptocurrencies , the MEPs chose to err on the side of caution rather than go for high handed oversight.
Cryptocurrencies like Bitcoin have been around for nearly 7 years now. Though the currencies themselves have remained on the fringes save for the occasional bad press for alleged links to criminal activity, the actual technology behind them have attracted considerable attention from mainstream financial institutions and banks. Hailed as the next big thing in financial technology, small tech startups and the big enterprises alike are exploring ways to integrate them into mainstream financial services.
Governments and regulatory agencies can ill-afford to ignore blockchains simply due to their sheer disruptive potential. Yet excessive regulation at such an early stage could very well inhibit innovation vital for the evolution of the technology. But the technology can also pose significant security and law enforcement headaches if left unattended.
In this context, the report submitted by German Socialist MEP Jakob von Weiszacker has received the vote of approval from the EU Parliament. The report calls for the creation of a general fintech task force that will look at all emerging technologies including cryptocurrency technologies. Voicing his approval for the decision, Finance Commissioner Jonathan Hill said: “….this is both an important and exciting area and I welcome the very balanced approach to keep an eye on developments, embrace the opportunities but be alert to the dangers.”
With the creation of such task-force, MEPs hope to stay on top of the latest developments in the fast evolving field of blockchain technologies. The plan at least, is to foster innovation in the field while remaining fully equipped to enforce legislation if and when the need arises in future. As to the efficacy of this plan, the future alone holds the answers.