Crypto-enthusiasts aim to escape central banks and fiat currencies, not to learn that all the cryptocurrency companies they support will eventually be evened out with banks thanks to the strict regulations.
European Central Bank (ECB), has stressed the importance of strengthening controls over the cryptocurrency industry. It also highlighted its volatility, and associated criminal activities.
In January of this year, ECB President Christine Lagarde called an “extremely speculative asset.” According to her, “criminal investigations” have revealed that cryptocurrency is used for money laundering, therefore it’s necessary to regulate it.
Dmitrijus Borisuka, CoinGate’s CEO, spoke to DailyCoin about possible regulatory issues. CoinGate, a Lithuanian fintech firm that provides cryptocurrency payment processing services to various companies, was founded in 2014.
“There’s a concern about the travel rule because it requires a standardized solution of how you would solve problems coming from the banking sector; so from the centralized sector to build something on cryptocurrency, which is decentralized in its essence. We’re trying to mitigate all the potential problems and be proactive,”
Borisenka told DailyCoin.
Borisenka said that crypto-companies would have to adhere to six to seven pillars, in addition to regulating financial terrorism and money laundering.
It includes having different authorized capital as well as ensuring that all outsourcing processes are properly regulated.
“With the current regulation, we are happy and also trying to make proposals on how we can even provide more info and be more transparent. But when it comes to equalizing cryptocurrency to electronic money institutions, I think it’s too much, and it would be very difficult to operate under such conditions”
, said Borisenka.
Borisenka said that unison is needed in all parts of the world. This means that every country should agree to certain regulations.
“Because the EU could put our company in a situation where we would not be able to have any competitive advantage against our US colleagues, let’s say”
, he said.
Lithuania was one of the top seven blockchain leaders worldwide in 2018. The country has accumulated experience in the industry’s development and applied practices to create a business-friendly environment for blockchain companies.
“In a free world, I think assets should be diversified, people should be able to choose where they see the values. Cryptocurrency is not a standard, and I was never a proponent of the idea that crypto is here to replace everything,”
According to him, crypto has much to offer, and there needs to be regulations “but everything should be regulated in accordance to the technology, and not to what is being built on the banking layer”.
CoinGate has been part of several working group discussions that include the EU, Parliament, and other regulatory organizations.
At the Global Brands Award 2021, CoinGate was awarded as Most Innovative Cryptocurrency Payment Gateway in Europe.
The company periodically teaches institutions how the technology works, and the potential problems and risks.
“We are already regulated, even before regulations came in we already started to implement a sufficient amount of anti-money laundering and terrorism financing prevention. We believe regulation isn’t new, and support it. The problem with it is that if you over-regulate the industry, all the consumers will go into totally decentralized platforms,”
On The Flipside
- Crypto regulations might be necessary to beat financial crime and other shady activities. Over-regulation can cause problems for crypto businesses.
- The regulations are currently in the midst of being finalized and may change.
Why Should You Care?
The concept of cryptocurrency can be associated with financial freedom and self-sovereignty. But, regulations in place could pose a problem for users of cryptocurrency and businesses that use blockchain technology within the EU.
Watch the full interview here:
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