THE European Union’s financial watchdogs are seeking to burst bitcoin’s bubble to avoid a price boom, after cautious regulators have watched it’s price soar to nearly $20,000 (£14,391) in 2017.
Valois Dombrovskis, vice president of the European Commission, has cited “clear risks for investors and consumers associated to price volatility”. He has written to three of the bloc’s financial watchdogs warning them of a potential bubble.It comes as the currency’s price had plummeted – and largely levelled – to around $11,800 (£8,520) today, down from roughly $20,000 at the end of last year.
Its current price is still much higher than its $1,000 (£719.57) value at the start of 2017, and the price of other cryptocurrencies has lifted in its wake.
The UK’s Financial Conduct Authority has also issued warnings, one of which covers “initial coin offers”. The term describes a way of raising funds where issuers accept a cryptocurrency, like bitcoin, in exchange for a token that represents something related to a firm or project.This could include a share of some kind of future service.
The UK regulator has warned that they come with a “good chance of losing your whole stake”.
EU policymakers are set to increase scrutiny on bitcoin amid fears a possible bubble will cause investors to lose out if it pops.French Finance Minister Bruno Le Maire is one of the strongest advocates for regulating cryptocurrency.He said earlier this week that Paris wants to “avoid the risks of speculation or possible financial traffics linked to bitcoin”.
Central bank Deputy Governor Jean-Pierre Landau has been appointed to lead an investigative mission on cryptocurrencies and how they might be regulated.
Source/More: Bitcoin price: European Union considers regulating cryptocurrency | City & Business | Finance | Express.co.uk
