European governments are pushing for bitcoin regulation as alarm grows that the world’s most popular digital currency is being used by money-launderers, drug traffickers and terrorists.
French Finance Minister Bruno Le Maire said he will ask his counterparts in the Group of 20 nations—whose presidency falls to Argentina next year—to consider joint regulation of bitcoin. His concerns are shared by the Italian government, which would be open to discussing regulation, according to a government official in Rome who asked not to named since the move is not yet policy. The U.K. is also backing European Union moves to bring in new rules that would apply to bitcoin.
“I don’t like it; it can hide activities such as drug trafficking and terrorism,” Le Maire said on LCI television, adding that he also had concerns for savers. “There is an obvious speculative risk, we need to look at it, study it,” he said.
Le Maire’s proposal came as bitcoin took another step toward acceptability with the launch of futures trading Sunday night at the CME Group (CME) venue. That’s a week after Chicago rival Cboe Global Markets (CBOE) introduced similar derivatives on the volatile cryptocurrency that was created in the wake of the 2008 financial crisis as an alternative to banks and government-issued currencies. Bitcoin was closing in on a fresh record $20,000 on Monday.
France is not alone in seeking to regulate a currency which is stepping further into the mainstream financial world. Italian Finance Minister Pier Carlo Padoan would be ready to discuss Le Maire’s proposal, according to the official in Rome, who said that the ministry had yet to receive any request from Paris.
The EU is working on new rules for cryptocurrencies. Stephen Barclay, Economic Secretary to the British Treasury, told lawmakers on Nov. 3 the government is negotiating with EU partners to “bring virtual currency exchange platforms and custodian wallet providers into anti-money laundering and counter-terrorist financing regulation.” The firms’ activities would be overseen by national authorities, Barclay said, adding he expected the talks to conclude at European Union level this year or in early 2018.
For the British government, digital currencies “can be used to enable and facilitate cybercrime,” according to a note from the Treasury. “There is little current evidence of them being used to launder money, though this risk is expected to grow,” the Treasury said. “That is why these regulations will help.”
Two Nobel economics laureates denounced Bitcoin last month. Joseph Stiglitz said it should be outlawed, and doesn’t serve “any socially-useful function.” Robert J. Shiller said the attraction of the currency was a narrative akin to a “mystery movie” that draws in people who want to outsmart the system.