No matter how hard one tries to ignore the presence of Bitcoin, it appears that the virtual currency is here to stay and it will, for the time being at least, be one of the hot topics to follow in the upcoming months. Binaryoptionswire has decided to shed more light on certain aspects of upcoming Bitcoin related developments, and we have recruited a new team member who will add a unique perspective on this and other issues. So, watch this space as the best from us is yet to come.
However, we cannot ignore an announcement that was publicized today, 6th February 2014, by the Cyprus Securities and Exchange Commission (CySEC), drawing the attention of the investing public to a warning that the European Banking Authority (EBA) had issued on 12 December 2013, in which it highlighted the possible risks that might be faced by individuals when buying, holding or trading virtual currencies, such as Bitcoin.
According to the CySEC announcement, “since currently there are no specific regulations for the protection of persons who transact in virtual currencies, it is important that the public is informed about the dangers associated with them, including possible loss of money.”
In essence, CySEC endorses and reiterates the contents of the EBA warning to consumers about virtual currencies, and it actually includes a link to the full version of EBA’s relevant announcement late last year. EBA, being a regulatory agency of the European System of Financial Supervision (ESFS) of the European Union, provides advice to EU institutions in the areas of banking, payments and e-money regulation, as well as on issues related to corporate governance, auditing and financial reporting. Its overall objectives include maintaining the financial stability in the EU, safeguarding the integrity, efficiency and orderly functioning of the banking sector and fostering consumer protection in financial services across the EU.
In its warning against virtual currencies, EBA points out that: “No specific regulatory protections exist that would cover you for losses if a platform that exchanges or holds your virtual currencies fails or goes out of business. While the EBA is currently assessing all relevant issues associated with virtual currencies, in order to identify whether virtual currencies can and should be regulated and supervised, you are advised to familiarize yourself with the risks associated with them.”
It should also be noted that the European Central Bank has also issued a report on the risks surrounding the use of virtual currencies. Several Central Banks in EU countries soon followed suit and issued warnings, including the Central Bank of Cyprus, which has in fact issued continued warnings about the use of the Bitcoin, terming it as “particularly dangerous”.
However, this hostile stance against virtual currencies which is adopted both by the Central Bank of Cyprus and by CySEC, has severely hampered the plans of the Cyprus Stock Exchange (CSE), who were particularly keen to introduce Bitcoin trading to the Cypriot bourse, paving in this way its course onto other Stock Exchange Markets in Europe as well. Innovating and introducing new products and derivatives is perhaps the only way forward left available to the officials of the CSE, since following the almost complete collapse of the Cypriot banking sector last year, it has lost more than 80% of its trading volume. Despite the warnings, some remain optimistic that gradually Bitcoin will manage to become regulated and therefore more widely accepted and used.