Are virtual currencies an opportunity to transfer money more cheaply or just a way for criminals to trade in illegal goods? The Parliament’s economic committee held a hearing on Monday to discuss the issues involved with experts, who told them EU regulation should not go beyond preventing and fighting crime. Parliament is currently working on a report on virtual currencies, which the economic committee is expected to vote on in April.
What are virtual currencies?
A virtual currency, such as for example bitcoin, allows you to transfer money without having to use banks. It uses a cryptographic technology called blockchain that builds a shared and publicly verifiable database of transactions to prevent fraud. This creates trust between sellers and buyers, thus eliminating the need for banks to get involved to verify the process.
Benefits and risks
Virtual currencies offer both advantages and drawbacks. Transactions in virtual currencies can be cheaper, faster, more secure and more transparent. During the hearing organised by the economic committee, Primavera De Filippi, a permanent researcher at the National Centre of Scientific Research in Paris, said that the blockchain technology can also be regarded as „some kind of regulatory technology, enabling laws to be enforced more transparently and more efficiently”. She added: „It solves the problem of who watches the watcher.”