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European banking supervision warns Bitcoin

2014-03-21  |  Comebuy News

The European banking authority (EBA) has warned of potential risks, which may arise from the "purchase, possession or trade" virtual currencies like Bitcoin. The EBA fears that consumers due to lack of State regulation could lose their money through the use of virtual currencies.

The EBA indicates that consumers in the EU have not the consequences of the collapse of a platform, which is a virtual currency, are protected. Also, there is no guarantee that the value of a currency like Bitcoin remain stable.

The Authority sees various security risks. Digital wallets for virtual currencies that are stored on computers, laptops or Smartphones, are not immune to hacker attacks. There are already cases in which consumers have lost substantial amounts of virtual currency. The prospects to get the money back, were very low.

Bitcoin payments be made anonymously, there is no right to a refund according to EU law. The anonymity allows misuse for criminal purposes such as money laundering also, so the EBA continues. Such abuse could cause that a platform in the short term would connected by authorities without the consumer would have the possibility, in a real currency exchange their money again.

The EBA still has not completed the examination of all relevant aspects of virtual currencies according to own. Then she wants to determine whether they need to be regulated and monitored.

There is also an outspoken proponent of virtual currencies. Bank of America Bitcoin classified in early December as a major method of payment for E-commerce. Also PayPal Chief David Marcus Bitcoin considers a good idea. However, he criticized the still high price fluctuations.

[with material by Don Reisinger,]

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