Eric Demuth, the co-CEO of Bitpanda, the largest bitcoin broker in Austria and one of the biggest in Europe believes that the pioneer cryptocurrency should be regulated in a similarly to gold.

Regulations Offer a Platform for Legitimacy

There has always been a fair amount of comparison between bitcoin and gold with many experts pointing to a number of shared characteristics exhibited by both assets.

Now, according to the leadership of Bitpanda, bitcoin should enjoy the same legislative framework that gold enjoys instead of the tightly regulated nature of other asset classes like stocks or bonds.

In an interview with Bloomberg, Demuth stated that regulations would enhance the legitimacy of companies like Bitpanda operating in the market. He intimated that the Austrian crypto brokerage firm had been striving to become regulated, but all their efforts have thus far proved unsuccessful.

Demuth is of the opinion that a gold-standard form of regulation for bitcoin would be most advantageous to the market.

Gold, just like bitcoin, is seen as a potential vehicle for money laundering and tax evasion but no special capital requirements are imposed on gold.

Banks also view gold in the same light as cash or government-issued bonds and VAT is not imposed on the retail sale of gold within the EU. Another defining feature of the gold-standard regulations is that the onerous capital and conduct rules present in the regulatory framework for stocks and bonds are absent.

The Bitpanda CEO continued in stating that cryptocurrency transactions exceeding $12,300 should be subject to anti-money laundering regulations. However, applying strict restrictions on smaller transactions has the potential to stunt the growth of the market.

In a related development, the Austrian Ministry of Finance announced in February 2018 that it was examining potential regulations for the cryptocurrency market based on established rules for gold and derivatives.

While this is ongoing, the Austrian Central Bank is still issuing warnings about the dangers in the crypto market. Despite the lack of adoption by stakeholders in the mainstream financial markets, Bitpanda continues to interact with many state agencies.

The European Union as the Driver of Regulations

Despite the almost constant clamor for the cryptocurrency market to be regulated, creating an appropriate regulatory framework has proved to be a challenging exercise in many countries around the world.

Some countries have effectively banned cryptocurrencies, while others have tried to impose strict restrictions on the market.

Part of the problem comes from agreeing on a universally accepted classification for cryptocurrencies with some tokens functioning as utilities, others as securities and some others as real currencies.

Paul Klanschek, the other half of Bitpanda, is of the opinion that crypto regulations in Europe should come from the EU level.

He asserted his belief that regulators on a national level don’t have the requisite expertise to develop a robust regulatory framework for the cryptocurrency market.

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Author: BTCManager.com